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Finance Minister P Chidambaram today exuded confidence the sagging economic growth would revive soon and economy this year would grow at least one per cent more than the last.
The final FY13 gross domestic product (GDP) numbers are expected early next week and the GDP is widely expected to be five per cent. In the first three quarters of the past year, the economy logged just 5.1 per cent growth.
"The economy and business has slowed. (But) this year, I expect the economy to grow at least by one per cent more than last," he said, after inaugurating state-run lender Canara Bank’s regional office here.
Chidambaram, who took a slew of sentiment-boosting measures since his return to the finance ministry last August, said FY15 growth would be a percentage point higher than the current year and soon touch the potential growth rate of eight per cent.
"Next year, I expect it to grow another one per cent more than the current year. We should soon reach our potential growth rate of eight per cent," he said. The Economic Survey pegged GDP growth between 6.1 and 6.7 per cent for FY14.
In its annual monetary policy announcement on May 3, the Reserve Bank had estimated growth for the year at 5.7 per cent.
Chidambaram, however, stressed that financial sector regulators, supervisors and institutions will have to gear up for the challenges posed by accelerating growth.
"We have to do business in a different way to manage the size. Why are our institutions sometimes found wanting, why are regulators found wanting? Its because they have not built the capacity to manage size and scale," he said.
The finance minister named departments of income tax and customs where such instances have been found.
"To deal with exponential growth, as against normal growth, one has to build capacity," he said while asking the management of Canara Bank to invest in human resources and technology.
Chidambaram also asked banks to distinguish between the wilful and business cycle-affected honest defaulters, and specifically asked them not to abandon the latter group.
Drawing from how lower-rung staff at banks has imbibed multi-tasking skills, the minister said senior-level officers should also practise this. Multi-tasking creates the right team spirit and the customer also goes back happily as he gets the required service, he said.
Earlier in day, the minister attended the board meeting of the insurance behemoth LIC.
