Chidambaram optimistic of 8.5% economic growth in FY'09

Finance Minister P Chidambaram on Friday expressed confidence the economy will expand close to 8.5 per cent in the current fiscal, enthused by a nine per cent GDP growth in 2007-08 even as manufacturing slowed down.

“Despite rise in commodity and oil prices, financial turbulence and meltdown of some global financial institutions, India has been able to grow at 9 per cent for the third year running,” Chidambaram said immediately after release of the GDP figures.

“There is no reason to believe we will grow below 8.5 per cent (in the current fiscal). In fact, one or two among us who think we will do better than 8.5 per cent,” he said.

The revised official estimates put the economic growth rate at nine per cent in 2006-07, up from 8.7 per cent estimated in advance by the Central Statistical Organisation, on the back of agriculture expanding at 4.5 per cent against 2.6 per cent projected earlier.

With this, average annual growth rate has turned out to be 8.9 per cent during four years of the UPA government. However, manufacturing growth was revised downward to 8.8 per cent, from 9.4 per cent in the advance estimates, that pulled down overall industrial growth rate to 8.5 per cent during 2007-08.

Describing an 8.1 per cent inflation as worrisome, Chidambaram said that controlling price rise and boosting manufacturing are not conflicting objectives for the government.