India heading for 9% growth: Chidambaram

India heading for 9% growth: Chidambaram

Colombo: India is heading for a 9% growth this year on top of buoyant investments and domestic environment, Finance Minister P Chidambaram said here.

“Aggregate efficiency of both capital and labour and the 35% investment in proportion to the GDP ratio quiet easily translates to about 9% growth," Chidambaram said here.

The Finance Minister, who was replying to questions after delivering the annual Lakshman Kadirgamar Lecture here on Sunday, attributed the high foreign exchange reserves of over $250 billion to high capital inflows.

“Capital inflows are very large that is why we have a high foreign exchange reserves," he said.

“If the level of investment in any country is 35 per cent and the country can make gains with capital and labour. I think it is reasonable conclusion that that country will witness very high growth," Chidambaram remarked.

When asked about the “secret mantra" behind the high economic growth being registered by India during the last few years, Chidambaram said “there is no secret to growth. Sound macro economic policies followed anywhere in the world will lead to high growths".

“India’s growth is led by investment and domestic environment. In fact in the last four years, investment is a prime driver of growth and domestic demand and consumption is a close second. Our investment to GDP ratio is now little over 35%," he said.

According to official estimates, the economy registered a growth rate of 9.3% during the first quarter of FY 2007.

The United Nations Conference on Trade and Development (UNCTAD) has forecast India’s economic growth at 8.5% during the current fiscal. Revised estimates by the Central Statistical Organisation (CSO) had put economic growth at 9.4% for the last fiscal.

However, UNCTAD’s estimate is closer to the Reserve Bank’s projection of 8.5% growth in 2007-08.

Keeping in view the sensitivities of a visit by a senior leader from Tamil Nadu to the island, Chidambaram was provided high security by the Sri Lanka. Indian security personnel were also flown in here to maintain a strict vigil during the visit.

Gun-totting security men could be seen all over the Bandaranaike Memorial International Conference Hall where Chidambaram delivered the lecture organised in memory of former Sri Lankan Foreign Minister Lakshman Kadirgamar who was killed by LTTE militants in August 2005.

The inaugural Lakshman Kadirgamar Memorial Lecture was delivered by the President of the Indian Council for Cultural Relations Karan Singh on August 10, last year.

During his visit which lasted a few hours, Chidambaram also called on Sri Lankan President Mahinda Rajapakse and Foreign Minister Rohitha Bogollagama.