7.5 per cent growth predicted

Special Correspondent

THIRUVANANTHAPURAM: Union Finance Minister P. Chidambaram has said that the UPA Government had succeeded in checking inflation during the 16 months it has been in office and was on an economic trajectory that would achieve a growth rate of 7.5 per cent every year.

Inaugurating the function marking the re-launch of "Veekshanam," the mouthpiece of the Congress in Kerala, Mr. Chidambaram said controlling inflation was one of the major achievements of the UPA Government led by Manmohan Singh. He said the economic growth was less than 5 per cent for three of the five years of NDA rule. In the last year of the NDA rule, 8.5 per cent growth was a statistical illusion. The NDA had left behind several problems. New investments had almost stopped, with rising money supply. As a result, a rise in inflation.

"I am confident that we can grow at 7.5 per cent every year and find the resources that would take money to the rural areas by providing better health, employment, sanitation and housing facilities. The choice before the people is to opt for an investment-led growth. I am here not to distribute poverty, but to promote growth and investment that would bring tangible benefit to the people," he said.

He said India had earned much respect and awe mainly on account of the size of its economy and the rate of its economic growth. It is the second fastest growing economy in the world, and if it kept up this pace, it would be the fourth largest economy in the world.

Development outlays

He said the UPA Government had earmarked outlays for various development sectors. It had spent Rs.1,15,000 crores in the farm sector, bringing 67 lakh new farmers under the cover of credit. This year's target of 1,41,000 would be exceeded. More than 5,38,000 new self-help groups had been formed and this would be further promoted. The banks had given 1,75,000 education loans, worth Rs.3,500 crores.

Later at a press conference, Mr. Chidambaram said attempts were being made to bring down the fiscal deficit of the States. Government debt, he said, was bound to increase as long as there was fiscal deficit. The ratio of interest payments to total receipts had been brought down from 27.49 per cent in 2001 to 25.50 per cent today.

In reply to a question on whether he was under pressure from the Left parties to mend his economic reforms programmes, Mr. Chidambaram said the Government decided the economic policy. "They have their point of view. We are willing to discuss issues with them," he said.

Asked why the Government was finding if difficult to push through foreign direct investments and disinvestment in public sector undertakings, Mr. Chidambaram said the Left had opposed disinvestment only in the Navaratna companies.

He had gone forward with the proposals achieving 49 per cent FDI in the civil aviation sector, 74 per cent in the telecom sector, and 74 per cent in the banking sector.

President of the KPCC Ramesh Chennithala presided over the function that was attended by the Congress Working Committee member A. K. Antony and Chief Minister Oommen Chandy among others.

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