"Consumer inflation in India is entrenched due to high food and fuel prices, and monetary policy has little impact in curbing these prices," he said. "There are no quick fixes for inflation, will take some time to fix it," he added. "Demand (for food and fuel) is being stoked by the fact that we have high fiscal deficit and that fiscal deficit was not contained for a fairly long period, I think over a period of two years," Chidambaram said.]
Unveiling UPA government’s agenda for the remaining six months of its second term, he said liberalising natural gas pricing as well as clearing impediments facing projects figure high on priority.
“I have a whole list of things to do on my table and follow it everyday. We have to liberalise capital markets, we have to liberalise financial sector, we have to fix the price of gas and oil. We have tried to fix the issues in coal sector so that more coal is produced. We will have more meetings of CCI to unblock stalled projects.
“There are whole series of things across the spectrum that needs to be done and we will do it, just as we have done something everyday for last 16 months,” he said at the India Economic Conclave organised by ET Now.
Stating that Indian economy was going through stress like the economies world over, the Finance Minister said economic growth will begin to pick up from next fiscal, rising to 8 per cent in two years time.
“I am absolutely confident that we can overcome this period of stress and return to high growth path. In 2014-15, our growth will be close to 6 per cent. In 2015-16, it will be close to 7 per cent and a year after we will be back to high growth rate of 8 per cent,” he said.
The Indian economy grew at a decade’s low rate of 5 per cent in 2012-13. In the first quarter of current fiscal the growth was at a four year low of 4.4 per cent.
“The first quarter growth of 4.4 per cent was disappointing.... I am totally confident that we must not take any misstep. We should continue to walk the path of fiscal prudence and fiscal discipline,” he said.
Several steps have been taken by the government to speed up the process of government clearances for industry, build an environment more conducive to trade and industry and increase investment in the economy.
The Cabinet Committee on Investment (CCI), headed by Prime Minister Manmohan Singh, has cleared 209 projects worth over Rs 3.84 lakh crore.
Nothing that perception of investors about India is changing, Mr. Chidambaram said the measures taken by government in fast tracking investment decisions have prepared the pitch for higher growth.
“We will continue to work till last day of this government. I can pledge on behalf of my government that we will work everyday until the last day of the term of this government. Whether we have taken right decisions, will be known as the (elections) results come in,” he said.
Noting that industry needs to be patient in order to see the results of government decision, Mr. Chidambaram said, “If you are patient and if you continue to do the right thing, you will find the path to climb back to high growth”.