See FY09 growth moderating at 7-8% range: FM

Finance Minister P Chidambaram said he expects moderation in growth as well as capital flows due to the financial crisis. According to him, while growth will moderate between 7% and 8%. However, he feels India is nowhere close to a recession despite the crisis having worsened and expects the GDP to return to 9% once the global situation stabilizes. He believes the economy would rebound in H2 of calender 2009.

Speaking at a press conference, the Finance Minister said he expects to contain the FY09 fiscal deficit within the 3% target despite the debt waiver and pay hike.

On a more optimistic note, the Finiance Minister added that he expects the economic fundamentals in India will continue to inspire confidence and added that there has been a marked change in the way India is viewed both within and outside the country. He believes the impact of global crisis on India was muted due to firm local demand.

Chidambaram said that the government has managed to curtail inflation substantially with fiscal and monetary measures. "RBI's policy is biased towards stimulating growth. If inflation declines further rates may also decline."

Accordin to Chidambaram, PSU Banks are seriously evaluating and consolidation strategies and feels banks are slow in disbursing funds to core sector projects. He sees the Fiscal Responsibility and Budget Management (FRBM) targets being achieved only after another year.

"We will introduce bill to get AFT as "declared goods" status in the coming session of Parliament"

Source: Moneycontrol