By IANS
New Delhi : With a sustained growth of around nine percent, India is well poised to wipe out poverty in 20 years and emerge as the world’s third largest economy, Finance Minister P. Chidambaram has said.
He also said Friday evening that the country’s financial requirements towards infrastructure stood revised to $475 billion at current prices over the next five years, against an earlier estimate of $320 billion.
“We are growing and will continue to grow at around 9 percent,” Chidambaram told a valedictory dinner for foreign diplomats from some 25 countries who attended a professional course organised here by the Foreign Service Institute (FSI).
“Studies show by growing close to 9 percent, we will become the third largest economy in 20-25 years,” he said. “We must produce wealth and then divide it equitably. How can we have a welfare state without wealth?”
Chidambaram said infrastructure was the main constraint to growth and this was pulling down the expansion of gross domestic product (GDP) by as much as 1-2 percent.
“The challenge of infrastructure is huge. The requirement of funds is humungous. It had been estimated that between 2007 and 2012 we would need to invest over $320 billion in the infrastructure sector alone,” he said.
He said now the level of estimated funds required has been revised upward by an official panel on infrastructure financing to $384 billion at 2005-06 prices, and that means $475 billion at current prices.
“But I can say with confidence that no country needs, and no country but India can absorb, such large funds for the infrastructure sector,” he said, adding that the increase in savings and investment rates gave him that self-assurance.
He said $130 billion was required towards energy, $66 billion for railways, $49 billion for national highways, $11 billion for seaports and $9 billion for civil aviation.
The minister said he was particularly concerned about the performance of India’s farm sector, which had seen stagnation in both production and the area under food grain between 1998 and 2007.
While the area under food grain had stagnated at between 120-125 million hectares, the productivity stood virtually frozen at 68-73 million tonnes for wheat and 85-91 million tonnes in the case of rice.
“It is, therefore, necessary that we urgently address the issues relating to both production and productivity,” Chidambaram said, adding that the Rs.250 billion package announced recently should reverse the situation.
The participants at the 43rd batch of FSI’s course for professional diplomats came from countries including Bhutan, Sri Lanka, Mozambique, Turkmenistan, South Korea, UAE, Cambodia and Lesotho.