Finance minister P Chidambaram on Thursday said the India economy was showing early indications of recovery, and was likely to do much better than projected.
Exports picked up in the last three months, negative growth in manufacturing stopped --, in fact -- and there has been a
reasonable rise in freight traffic.
With farm output looking robust and impact being felt of reforms initiated last year, he said, India could post a growth rate of 5%, or even closer to 5.5% for 2013-14.
"I know that the World Economic Outlook report does not share my optimism, but I may tell you that we do not share their pessimism," he said at a DC think-tank.
The International Monetary Fund's latest World Economic Output report released on Tuesday projected 3.8% growth rate for India in the 2013 fiscal, 1.8% lower than its last projection.
But the finance minister conceded even 5.0% growth looked tame compared to the blockbuster numbers of the boom years, specifically, the "standards we set for ourselves in 2004".
"I would be the first person to say that we need to do better and recapture the growth momentum of the last decade," he said to an audience eager for good news from India.
Chidambaram waded straight into issues raised recently about the slow pace of reforms, multi-brand retail, too much regulation and localization of production.
About insurance reform, the minister said there is hope -- citing assurance from leaders of the main opposition party, the BJP -- it may be passed in the winter session of Parliament.
On FDI in multi-brand retail, the minister said that companies interested in coming to India will have to work within the policy framework in place.
"It may be not the ideal policy, it may not meet all the requirements," said the minister "but this is the policy in place." Genuine investors will find it adequate, he added.
Foreign investors are always asking for more, specially in India. In China, by contrast, investors tend to accept the rules and regulations far more readily.
But he did concede regulators in India still have some way to go. Some of them "have not done their job as well as I would like them to do".
They are still under the administrative ministries that "exercise undue control of influence over them". But, he said, they will be able to "liberate" themselves over a period of time.
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