Finance Minister P. Chidambaram is hopeful of the country achieving eight per cent plus growth by 2015-16, riding on factors such as a young workforce, skill development and world class infrastructure.
Addressing the India Day event during annual meeting of the Asian Development Bank (ADB) here, Chidambaram said, “India’s potential growth rate is eight per cent and we cannot afford to become complacent and sit back. We are a mature and vibrant democracy. We have taken effective steps to address economic slowdown and fiscal stress in the past few months.”
These measures had started showing results, he said, adding that he felt that India would grow above six per cent in 2013-14 and seven per cent in 2014-15.
The Finance Minister listed four factors that would take India back to eight per cent plus growth. First, India’s population is young. According to a recent IMF study, India’s demographic dividend could add about two percentage points to per capita GDP growth over the next two decades.
Second, India is focusing on building world class infrastructure, which would spin off in terms of job creation and enhanced investments in the manufacturing sector.
Third, a large portion of India’s population engaged in agriculture would be drawn to better jobs.
“We intend drawing this large workforce into the high value addition jobs created by investments in manufacturing,” he said, adding that an ambitious skill development programme was underway.
Fourth, India’s household consumption was a healthy 57 per cent of GDP, and as incomes grow, a significant portion of it will be spent.
Chidambaram said steps were being taken to address the current account deficit by moderating gold demand through higher import duties and efforts to monetise idle gold stocks lying with citizens, gold exchange traded funds and asset management companies.
Steps were also being taken to tackle food inflation by targeting higher production of protein foods and improved supply chain logistics to enable comprehensive procurement, processing and distribution of agri produce that would potentially reduce wastage and control food price inflation, he said.