Economy to grow by 5.5 per cent this fiscal: Chidambaram

NEW DELHI: Finance Minister P Chidambaram today exuded confidence that the economy would grow by 5.5 per cent in the current financial year and improve to 6 per cent in 2013-14.

"Today eurozone crisis is still continuing, recession in Europe, Japan and Brazil... naturally these affect us. Still our economy has been witnessing growth and this year it will be 5.5 per cent," Congress sources quoted Chidambaram as having said during pre-budget consultations with party leaders at the AICC headquarters.

Chidambaram expressed optimism that India would come out of the low GDP growth and see 6 per cent next year followed by 7 per cent growth rate leading to 9 per cent gradually.

He sounded confident of achieving 5.5 per cent in 2012-13 despite Central Statistical Organisation place the figures at 5 per cent. The economy grew by 6.2 per cent in 2011-12 and 9.3 per cent a year ago.

Observing that the Indian economy was hit adversely by the global financial meltdown of September 2008, Chidambaram said that the stimulus packages provided by the then Finance Minister Pranab Mukherjee had helped in recovery.

Chidambaram also emphasised that there should be a balance between the welfare schemes and the need to promote growth as without it would not be possible for the government to fund social sector programmes.

The interaction saw leaders like Jagdish Tytler and Ajit Jogi wanting the Centre to ensure that it gets credit for the welfare schemes being funded by it as non-Congress governments are cornering the glory.

While Mohan Prakash pleaded for special package for fisheries and efforts to reduce prices of seeds and fertilisers, Praveen Davar wanted widening of the tax net by including traders and shopkeepers.

He also demanded one per cent cut on salaries and 0.5 per cent in pension of MPs as well as government employees so as to help the have-nots.