Asserting that reform measures and fast-tracking of the decision making process have yielded results, Finance Minister P. Chidambaram on Thursday said India would certainly return to 8 per cent growth rate if past mistakes are not repeated.
“In the last year and a half, we decided that we need to do more and be more decisive...the results are there to see. Our economy has stabilised,” Mr. Chidambaram said in Davos.
“Last year I said we will grow by five per cent this year, 6 per cent during the next year and steadily we will move back to 8 per cent growth,” he said.
Speaking at the WEF Annual Meeting while addressing a session on BRICS countries, Mr. Chidambaram said: “If we avoid some of the mistakes that we have made and if we are decisive, I have no doubt that in three years we will be back to 8 per cent growth”.
The Minister said that income inequality and middle class stagnation are big risks in every country.
On people coming out of poverty, Mr. Chidambaram said: “India has done well on this front, while China has also done well.
“It is one of the reasons why food inflation is high in India. Still we want to do many more things to further lower the income inequality...we would like to tax the rich a little more, but since we want to encourage the entrepreneurs to do business, we are going slow on that,” Mr. Chidambaram said.
Defending the role of the government in economies, Mr. Chidambaram said: “When US and European banks were in crisis, the government had to pitch in. There is a role for the state to play. If you look at Indian banking industry, we have got state-run banks, private banks, foreign banks and now we are licensing a few more banks.
“You cannot wish away the role of the state as that is a very important role,” he said.