FM confident of 9 per cent GDP growth this fiscal

Encouraged by the 9.3 per cent GDP growth during April-June period and inflation falling below 4 per cent, Finance Minister P Chidambaram on Friday expressed confidence that the economy will expand by around 9 per cent in the full fiscal and investments will remain buoyant.

"Although provisional estimates of 9.3 per cent GDP growth during first quarter are a shade below than the growth last year (in corresponding period), but given the circumstances on account of external situation, it is quite satisfactory," Chidambaram told reporters in New Delhi.

The government as well as the RBI have earlier said the economy would grow by 8.5-9 per cent during the fiscal, but the country must guard against external shocks such as the rising prices of crude oil and other commodities.

"As long as savings are high, capital formation remains high, it supports the hypothesis that investment will remain buoyant. I am confident that GDP growth rate will remain close to 9 per cent this year as well," he said.

It will ultimately help to revise the average GDP growth of 8.6 per cent over the past three years, he added.

Stating that the last few months had been of tightening monetary policy, he said the government would make every effort to see that investment remains buoyant and credit to productive sectors would be ensured despite tight monetary policy.

Chidambaram also said sectors like electricity, water and sanitation showed better performance by achieving 8.3 per cent growth in the first quarter this year against 5.8 per cent a year ago.