Asserting that the government has the capacity to overcome "this period of stress", Union Finance Minister Chidambaram on Saturday said the
current account deficit will be contained below $70 billion this fiscal.
"Last year I was told by pundits, analysts and rating agencies and all the wise people who appear on televisions every day that we cannot contain the fiscal deficit.
"I'm happy that we were able to surprise them; ....We are told that the government cannot contain the current account deficit, I said last year we had the deficit of $88 billion, this year I'm betting at $70 billion, and I will contain it below 70 billion," he said at a State Bank of Mysore event.
"Let me tell you, I will surprise them once again, we will contain it below $70 billion. I say this because we have intellectual capacity among our senior economists and administrators, we have the institutional capacity and above all we have our people who give us the confidence to overcome stress," he said.
Stating that "Our people save and that is a biggest asset to us", Chidambaram said, "people of India save like no other people anywhere in the world, in worst of times our savings ratio did not go below 30 per cent."
"If those savings are channelised into productive investment and if we create a climate where people can take risk, I have no doubt in my mind that we will be able to get over this period of stress."
Asking people to be confident, he said "this year our growth will be better than last year, and next year we should move to a growth close to between 6-7 per cent and in the year after that we must discover our true potential growth rate of 8 per cent."
Answering a question about his confidence in controlling the CAD, he said "The confidence comes from my knowledge of the numbers, from the fact that gold imports have sharply compressed in the month of July, August and September, exports have picked up briskly and smartly."
"Only yesterday the Governor (of RBI) said he has got $5.6 billion of FCNRB accounts, so I'm confident and I want you to share my confidence," he added. .
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