Sustaining present growth momentum is an important challenge, says Chidambaram

November 14th, 2007 - 10:35 am ICT by admin  

Highlighting India’s recent GDP growth of over 9 per cent, Chidambaram said that if this growth rate were sustained then the national per capita income would be doubled in about 9 years.

However, he later added that sustaining such growth rate is one of the important challenges.

“In the medium and long term, one of the biggest challenges is to effectively sustain the high pace of growth witnessed in recent years. This requires development of diverse, regionally balanced, physical and social infrastructure,” he said at the Annual Economic Editors’ Conference in the national capital.

He pointed out to the ‘humungous’ nature of investment required in the infrastructure sector and to find ways and means to mobilise those resources.

Weakness in the farming-sector is also one the major concern for the UPA government, which has been in power for the last three and half years.

“Issues like stagnant yield rates in many important crops, declining per capita availability of food grains and need for additional public investment call for urgent policy attention,” Chidambaram said.

He said that the Eleventh Five Year Plan targets a four per cent growth in agriculture and action points for the Centre and the States for achieving a four per cent growth rate have been drawn up.

“However, even if all these tasks are completed, average per capita increase in income in the agriculture sector will still be about two thirds of the overall increase,” he added.

Among the short-term challenges, the Union Finance Minister pointed at the effective management of an ‘unprecedented influx of capital inflows’ and ‘burgeoning foreign exchange reserves’.

“Further, domestic prices may also be impacted by international hardening of food grain, commodity and energy prices. The economy must also be insulated to the extent possible from the potentially adverse effects of the economic slowdown occurring in some of its major trading partners,” he added. (ANI)

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