Chidambaram says 8 per cent GDP growth possible in next 2-3 years

Former Finance Minister P Chidambaram has said India can achieve 8 per cent growth in the next 2-3 years by following the path of fiscal prudence.

Chidambaram said if the government continues to remain on the path of fiscal prudence, promotes savings and investments, and be more diligent in implementing projects, it would be possible to get back to 8 per cent growth.

"I remain very confident despite change in government, that if we remain firmly on the path we will get back to 8 per cent growth in about 2-3 years," he said at an event in the national capital.

The Indian economy grew by 4.9 per cent in 2013-14 fiscal. However, in the April-June quarter, the growth picked up to 5.7 per cent. The economy was growing at over 9 per cent before it was impacted by the global financial crisis of 2008.

"Financial sector reform is also very much required for achieving 8 per cent growth. FSLRC (Financial Sector Legislative Reforms Commission) has made far reaching recommendations, some are legislative, some are non-legislative in nature. Non-legislative recommendation should be carried out over a period of next 2-3 years," he said.

Chidambaram said it is possible to finance 8 per cent growth by domestic savings and some foreign direct investment.

"Anything more than 8 per cent is bound to become inflationary which will exacerbate fiscal deficit. We have to borrow more and there are consequences of borrowing more and enlarging the fiscal deficit and current account deficit," he added.