Finance minister P.Chidambaram on Monday said the Indian economy would clock a growth rate of between 7 to 8 per cent in 2008-09 despite the piling rubble of the global financial crisis, making it among the fastest growing economies in the world.
“In our view, we may expect a moderation in growth rate in the current year to a level between 7 and 8 per cent. India would still be the second fastest growing large economy in the world,” Chidambaram said at the annual economic editors conference.
The average forecast of professional agencies for GDP growth during 2008-09 is 7.9 per cent. In its mid-term review, barring domestic or external shocks, the Reserve Bank of India (RBI) has estimated gross domestic product (GDP) growth during 2008-09 to be between 7.5 and 8.0 per cent.
“On the whole, the general outlook continues to be one of cautious optimism,” the finance minister said.
He said the bias of monetary policy would be tilted towards growth stimulation.
“If the rate of inflation continues to decline, the policy rates may also moderate and the bias in favour of growth may deepen,” he said.
Chidambaram said the government may have to "revisit and revive" pending reforms and he hoped credit flows would improve by the end of November or December.
“As and when required, we must introduce measures, particularly in the financial sector, to make our economy more competitive and the economic regulatory and oversight system more efficient, quick and responsive to global developments,” he said.