Govt to take more steps to turnaround economy: P Chidambaram

In a bid to revive the economy and boost investment sentiments, the government is all set to take some more steps over the coming few weeks.

Economic growth in the first half of the financial year fell to 5.4 per cent, against 7.3 per cent in the corresponding period a year ago. Growth in 2011-12 fell to a nine-year low of 6.5 per cent.

Finance Minister P Chidambaram while at an event in New Delhi said: "I am confident that the steps we have taken , and some more steps that we will take in the next few weeks, will help turn the Indian economy around."

In the recent past, the government opened up multi-brand retail sector to foreign direct investment (FDI) and hiking foreign investment cap in the aviation sector to boost economic growth and restore investor confidence.

"It is too early to say whether the measures have begun to bear fruit, although it is our expectation that they will do so," Chidambaram said.

Besides on Thursday, the Union Cabinet cleared setting up of Cabinet Committee of Investment to fast-track large project entailing investment of over Rs 1,000 crore.

In the current financial year, the Reserve Bank of India (RBI) expects it to be around 5.8 per cent.

Stressing that the present challenge is different from the one faced in 2008, Chidambaram said: "The present challenge calls for bold and innovative measures".

While in 2008-09 imports had reduced considerably due to fall in international crude oil prices, the situation at present is different as, while exports are declining, imports continue to remain high mainly on account of crude and gold.

Chidambaram said with rapid globalisation of economy, external sector is becoming more vulnerable.

Concerned over sticky retail inflation, the minister said: "There is no reason at all to become complacent".

While headline inflation has moderated to 7.45 per cent in October, the retail inflation remains high at 9.90 per cent.

The finance minister also asked Asian G20 member nations and Russia to increase resource base of Asian Development Bank for development of the region.

With inputs from PTI