Finance Minister P Chidambaram. PHOTO: PTI
Finance Minister P Chidambaram affirmed his faith in the Indian economy, hinting that the worst may be over as India will have a bumper harvest and the troublesome current account deficit (CAD) will come down to $60 billion on the back of rising exports and declining gold imports.
"Core sector growth...strong monsoon and healthy exports augur well for economic growth. There are still many challenges, most important being inflation and reviving investment. But I think there will be green shoots even in investment. We are confident that the measures taken by the RBI and our own measures at maintaining fiscal discipline will eventually bring about a moderation of inflation," he said, addressing a press conference in the national capital on Friday.
The minister also expressed the government's resolve to extend full support to new investment proposals and said that corporates need not sit on cash. He asked them to start investing.
Chidambaram further said the government will endeavour to get the long-pending Insurance Amendment Bill, which seeks to raise the Foreign Direct Investment (FDI) in the sector to 49 per cent from 26 per cent, passed in the forthcoming Winter Session of Parliament.
As regards the Direct Taxes Code (DTC), he said, the draft amendments have been finalised and would be placed before the Cabinet for approval.
Referring to CAD, the difference between the inflow and outflow of foreign exchange, Chidambaram said he was hopeful of reducing it to $60 billion, down from the earlier estimate of $70 billion.
CAD touched the all time high of $88.2 billion or 4.8 per cent of the GDP in 2013-14.
Reflecting a pick up in the industrial activity, the core sector industries recorded 8 per cent growth in September, highest in the past 11 months.