Economy to grow at six percent at least: Kamath

November 16th, 2008 - 6:34 pm ICT by IANS  

New Delhi, Nov 16 (IANS) Although the mood of the Indian industry is gloomy due to the global downturn, the Indian economy, powered by strong domestic fundamentals, will grow at least at six percent this fiscal, ICICI Bank chairman K.V. Kamath said here Sunday. “I am the first one to concede that there is a change of mood to the other end of the spectrum,” Kamath, who is also the president of Confederation of Indian Industry (CII), told reporters on the sidelines of the World Economic Forum-India Economic Summit.

He felt that there was now a “disconnect between mood and practice. At the national council meeting of the CII last week, the mood was grim. But, when I asked if anybody had stopped any project due to the current scenario, not a single hand went up.”

Exports accounted for less than 15 percent of the gross domestic products (GDP) and, therefore, Indian industry will be leveraging the domestic marketplace, Kamath said.

He added that the rural India was totally insulated from the efects of the downturn.

“With commodities prices going down, inventory contracts are not being done, industry thinks prices may go down further. Once the floor is found, we will find that more contracts are done,” Kamath stated.

According to him, the Indian economy had been in a worse situation in 1990s, when the global financial situation was strong, but the domestic fundamentals were weak. “Even then we grew at 5.5 percent,” he said.

The head of India’s top private bank said industry would regroup in the next few weeks to figure out its response to the slowdown. “Indian industry is trying to find that equilibrium,” said Kamath.

He further praised the central government for taking “some far-reaching initiatives” in the last few weeks to cope with the crisis.

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