8 pc growth rate of GDP is imperative for two decades: Finance Minister P Chidambaram

NEW DELHI/PUNE: Finance Minister P Chidambaram expects the Indian economy to have grown 5.5 per cent in the second quarter of the current financial year.

Addressing the Annual Bankers' Conference in Pune, Chidambaram said that an 8 per cent growth rate of the gross domestic product is imperative for two decades.

Government will launch the payout of direct cash subsidy to people through the Aadhaar based system in 51 districts of the country from January 1, he said.

He said the government intends to complete roll out of the direct cash transfer through the Aadhaar system in the entire country by the end of 2013.

This will, among other things, facilitate the pay out of direct cash subsidies to the targeted beneficiaries.

"We want the roll out (of Aadhaar-based subsidy transfer) to be completed by the end of 2013," he said at the Bancon conference here.

The Finance Minister noted that the government spends "thousands and thousands of crores of rupees" on pension and various subsidies.

"We are going to launch the ambitious programme of payout of direct cash subsidy to people through the Aadhaar system in 51 districts across 15 states", he said.

Chidambaram said Prime Minister Manmohan Singh will take a meeting of the cash transfer committee on Monday in the run up to the implementation of the scheme from the beginning of next year.

He also said that India needs new means and resources to fund growth. Banks will drive the next phase of growth for the economy, he added. "Government wants every family to have a bank account."

Stating that the economy is in a slowdown mode, he said the economic growth is expected to be 5.5 per cent in the second quarter.

"For us 8 per cent growth is not an aspiration. We must aspire for over 8 per cent growth", he said.

Chidambaram on Friday had expressed hope that the Reserve Bank would be able to reduce key interest rate with the further easing of inflation.

"As inflation eases further, there will be an opportunity for monetary policy to take measures to mitigate growth risks," he said in a written reply to the Lok Sabha.