Rupee rise a concern: FM

Finance Minister P Chidambaram today expressed his discomfort with the appreciating rupee.

Speaking at a conference organised by the Hindustan Times, Chidambaram said rupee's sharp rise to over nine-year high (at Rs 39.33 against the US dollar) was not in the "comfort zone" of the government. He added the government was constantly monitoring the situation.

Chidambaram attributed the appreciation in the rupee to huge foreign fund flows. "We have a problem to handle and we will handle it," he said. The rupee has risen more than 12.5 per cent this year, leading to the government taking a number of steps to help exporters deal with the situation.

On economic growth, Chidambaram said the Indian economy grew by an average 8.6 per cent since the government came to power in 2004.

"The economy grew by 9.4 per cent in 2006-07 and 9 per cent growth is likely to be sustained this fiscal also," he said.

Pointing out that the most pessimistic GDP growth projection for the year was at 8.5 per cent, he said there was nothing to worry as India continued to attract investments.

"There is no slowdown in investment. There is a slowdown in certain sectors due to interest rates and seasonal factors. Growth looks positive to me," he said.

On Special Economic Zones (SEZs), the Finance Minister said: "I am not against SEZs. I am against their proliferation. They create a huge hole in the revenue system due to the tax sops associated with them," he said.