India will return to 8% growth in FY16: FM

Says country will recover from its stress this year

Finance minister P Chidambaram sees the Indian economy returning to its potential growth rate of eight per cent in 2015-16 and doing better in the current financial year.

“We can overcome the period of stress this year and post higher economic growth than last year. Next year, we will grow by six-seven per cent and achieve the eight per cent growth level in the year after,” he said. India saw five per cent economic growth in FY13.

Speaking at a State Bank of Mysore event here on Saturday, he said the country's economy would recover from its stress this year.  “Last year, I was told by pandits, analysts, rating agencies... that we cannot contain fiscal deficit. I am happy that we were able to surprise them. Again at the beginning of this year, we were told that the government cannot contain the current account deficit. I said last year, the CAD was $88 billion. This year I am  pegging it at $70 billion. Let me tell you that I will surprise them once again. I say this because, we have intellectual capacity.”

“We have very good economists, economic advisors and administrators and institutional capacity. If we are able to sit with them and work out the set policies and give them freedom, to implement it. Believe me, sooner than later we will find results," Chidambaram added.

The finance minister said the people of India were very good in saving their money, which would come to their rescue.

“In the worst of times, our savings did not go below 30 per cent and 36 per cent in 2007-08. I have no doubt, everyone in this country saves and that is what the great fate of this country. And if those savings are channelised into productive investment and if we create a climate where people can take risks. I have no doubt in my mind that we will get over this period of stress.”