By IANS
New Delhi : The $1 trillion Indian economy will expand 8.8 percent this fiscal, thanks to the boom in investment, but farm output continues to be a drag on overall growth, Finance Minister P. Chidambaram said Wednesday.
Chidambaram also told a post-budget interactive meeting with the members of the Federation of Indian Chambers of Commerce and Industry (Ficci) that he would like corporate India to help the government rein in inflation.
“You have to become more competitive and hold the price line,” said the finance minister, especially making his appeal to sectors like pharmaceuticals, auto and paper that will benefit from fiscal incentives announced in the budget.
“There is a lesson for the manufacturing sector,” he said. “Expand the volume of production and gain in volumes what you might lose in not increasing prices.”
The minister also exuded confidence that there will be a complete turnaround in India’s growth as well as consumption demand as a result of the government’s policy measures, including the fiscal sops given in the latest national budget.
“I don’t have any doubt in my mind that there will be an upturn in growth,” he said. “Demand will rise in 2008-09. I am bullish on growth and we hope to maintain 8.8 percent-plus growth.”
The Economic Survey for 2007-08, while expressing concern over the slowdown of the Indian economy in the third quarter, had also said that India was decisively on a high expansionary trajectory.
In a bid to lift overall sentiments, Chidambaram said the controls on inflow of overseas capital were only temporary and that the corporate sector was free to access international markets.
“We have not closed the external commercial borrowings window,” Chidambaram said, and added: “The restrictions are intended to be only temporary. When things get better we shall certainly revisit these restrictions.”