New Delhi, May 8: The economy has stabilised and efforts should be made to encourage foreign and domestic investment to boost growth, finance minister P. Chidambaram said today.
The finance minister also pitched for the continuation of RBI governor Raghuram Rajan by the next government as he was appointed for his outstanding credentials.
“Investment must revive in this country... the economy has stabilised. The investment cycle has to start again. Both domestic and foreign investment must be encouraged. That will lead us to high growth,” Chidambaram told reporters.
However, rating agency Moody’s in a research report said India would not be able to revert to a high growth path of 7-8 per cent anytime soon even if it pursued a strong reforms agenda.
“The depth of the issues to be addressed means that India’s economy is unlikely to return to previous growth rates of 7-8 per cent in the near future,” it said.
The rating agency projected that growth in 2014 was likely to be 4.5-5.5 per cent and in 2015, it would grow at 5-6 per cent. In 2012 and 2013, GDP grew 4.5 per cent annually.
Stating that PSUs alone are expected to pump in Rs 1.33 lakh crore in the current financial year, Chidambaram said FDI inflows in 2013-14 would exceed $27 billion.
The current account deficit has been brought down to $32 billion in 2013-14 from $88 billion in 2012-13 by imposing restrictions on gold and silver imports, which contracted 40 per cent in 2013-14.