Apr 22 2008
8-9% growth will be fine: PC!
The Finance Minister P.Chidambaram said that an 8-9 % economic growth will be fine for this fiscal year and that further export bans could be considered as a way to drive down inflationary expectations.
He said that to get a specific forecast for the year ending on March 31, 2009 is hard but we must aim at 9 per cent.
He said, “we must be happy if it’s between 8 per cent and 9 per cent.”
Chidambaram said that inflation is the biggest problem in Asia today. Increasing price of foodstuffs and other commodities is a matter of concern of developing countries.
He said, “Inflationary expectation is driving prices.”
The wholesale price index, which reached a 41-month highest of 7.81 in the week ended on March 29 get lowered to 7.14 per cent in the week ended on April 5. The central bank had aimed for close to 5 per cent at the end of the 2007/08 fiscal year and its medium-term goal is around 3 per cent.
Inflation was also being stoked by a mismatch between supply and demand, and by cartel-like behaviour in some sectors of the economy, said Chidambaram.
India has banned the export of some rice and Chidambaram said he would consider banning exports of other goods, even if that went against the principles of free trade.
“As a short term measure … we will consider such bans, too,” he said, mentioning the possibility of export bans in the steel sector.
