Washington: Indian Finance Minister P. Chidambaram is confident that Indian economy will soon regain its momentum and grow at over 5.0 percent and perhaps closer to 5.5 percent in fiscal 2013-14 despite predictions to the contrary.
After growing at an average of 8.5 per cent per annum between 2004-05 and 2010-11, Indian economy had registered a decline with a downturn in the global economy in 2011, he acknowledged at an event here Thursday.
But "India's experience in this period is not unique," Chidambaram said at Carnegie Endowment for International Peace, a Washington think tank, speaking on "Recapturing India's Growth Momentum."
"Virtually all the major emerging economies around the world have seen a sharp decline in growth -- the so-called Great Descent," he said noting in line with expectations of a gradual global revival, the Indian economy has also showed early indications of recovery.
India had seen a pick-up in exports between July and September; a reversal of the negative growth in manufacturing; and a reasonable rise in freight traffic, indicative of economic activity picking up, he said.
"With very good rainfall in the current year and a sharp increase in the sown area, we expect robust growth in farm output. We have also taken numerous reform measures over the past one year," Chidambaram said.
"We expect these measures to show their impact from the second half of the current fiscal and believe that the Indian economy will grow at over 5.0 per cent and perhaps closer to 5.5 per cent in 2013-14," he said.
Referring to the International Monetary Fund's World Economic Outlook which has lowered India's growth projections to 3.8 percent in fiscal 2013 and 5.1 percent in fiscal 2014, Chidambaram said it "does not share my optimism, but I may tell you that we do not share their pessimism."
India has at least six strong microeconomic growth fundamentals in its young demographics, international economic integration, an increasingly "capable" financial system, sophisticated firms, sophistication of the workforce and democracy, he said.
"Nothing has changed on these," Chidambaram said asking his audience "not to lose sight of the microeconomic foundations of Indian growth, which are delivering one doubling of GDP every decade."
With a resolve to strengthen these fundamentals, India was set to write a new growth story that "will captivate the world in the next ten to twenty years, as India takes its place as the third or fourth largest economy in the world," he said.