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High growth can be sustained, says FM

ECONOMY AT FULL THROTTLE

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BS Reporter New Delhi
Last Updated : Feb 05 2013 | 1:20 AM IST
An elated Finance Minister P Chidambaram today said India had the capacity to sustain the current high growth rate.
 
"Time has come to shed lingering doubts about the sustainability of high growth and scepticism about shift to a higher growth trajectory," he told reporters after figures showed that the economy grew 9.4 per cent in 2006-07, the fastest in 18 years.
 
He said the high growth in the first three years of the UPA government needed to be sustained with utmost care to eradicate poverty, generate quality jobs and improve human development indicators.
 
"It is in the larger interest of India that we maintain high growth for 10-15 years," he said, adding that the government would increase efforts to make the growth more inclusive.
 
He cautioned that high growth would put pressure on prices unless supply was augmented. "High growth leads to high demand and high demand does put pressure on prices. Unless supplies catch up, there will be some pressure on prices," he said.
 
Inflation had come down in the recent weeks and the government was keeping a watch, he said. The wholesale price-based inflation stood at 5.27 per cent for the week ended May 12.
 
On the appreciation of the rupee, Chidambaram said the concerns of one or two sectors like textiles would be addressed.
 
"The RBI is monitoring the movement of the rupee, and I suppose is taking or will take what all steps have to be taken," he said.
 
He said the huge foreign capital inflows showed the ability of Indian firms to raise funds internationally competitively.
 
"It's always a tight balancing act and I think between the RBI and the government we are fairly successful in balancing the need for capital and the need to maintain price stability," he said.

 
 

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First Published: Jun 01 2007 | 12:00 AM IST

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