Revival of interest by investors to push growth: Chidambaram

Bolstered by "revival of interest" by investors in India, finance minister P Chidambaram on Tuesday expressed hope that the country's economy will expand by 6-7% next fiscal, starting April.

"Current (fiscal) year, we will not do better than 5.7%. Next year, we hope to have a growth of 6-7%," he said, adding that with the revival in investment activities, India would be able to achieve its potential growth rate of over 8%.

Elaborating on the reason for optimism, Chidambaram said there is a revival of investor interest in India as a result of a number of measures taken by the government.

"People are coming to us for inquiries, approaching banks. There is a clear revival. I am not saying there is investment taking place, but there is a revival of interest," he said.

Chidambaram, who is here for investors' conference, further said India has the potential to grow over 8%.

"If investment gathers pace year after, we should get back to our growth rate of 8%. India's potential growth rate is above 8%. We have done in it before. We will do it again," he said.

The global slowdown has taken its toll on India's growth, and its GDP fell to 5.4% in the first half of the current fiscal.

It may end the year with a decade low growth of 5.7%.

India had posted growth rate of over 9% for three years in a row before the global crisis of 2008.

The government has taken slew of reform measures, like further liberalisation of FDI norms in sectors including retail and aviation, setting up a Cabinet panel to fast track projects, and reducing subsidy on petroleum products.

Besides, the government has also repeatedly stressed that it's widening fiscal deficit, a major concern of rating agencies, will be contained at 5.3% of GDP this fiscal and go down further in the coming years.