India's economy will grow "no better than" 5.7% in the current fiscal year but will regain traction in 2013-14, finance minister P Chidambaram said on Tuesday, as he sought to reassure global investors that the government remained committed to pro-growth policies and reforms.
Chidambaram is meeting investors in Hong Kong as part of a four-city tour to boost capital flows into the country.
He also said that the government has buried the "ghost" of the controversial General Anti-Avoidance Rule (GAAR). "There is universal acknowledgement that we have handled the GAAR situation fairly effectively and buried the ghost that GAAR will be some kind of a monster."
The finance minister sought to allay fears that India was in danger of losing its investment-grade credit rating and being downgraded to "junk" status. "After so many steps that we have taken, I think I should be less worried. There should be no case whatsoever for anybody to downgrade India."
"The silver lining is we are able to finance the current account deficit without reserves. Thankfully there are enough inflows of foreign direct investments and foreign institutional investment and companies are able to raise money abroad under external commercial borrowing."
The finance minister rejected any comparison between the economies of India and China, saying it is irrelevant. "They (China) are facing different problems. They are revenue surplus country. They got huge foreign exchange reserves."
He said that changes to diesel prices in India do not need Parliamentary support and are viewed as an executive decision because oil firms are owned by the government.
(With Reuters and PTI inputs)