Chidambaram Says India Growth to `Bounce Back' to 9% (Update2)
By Cherian Thomas and Kartik Goyal
Nov. 18 (Bloomberg) -- India's economy will ``bounce back' to 9 percent growth next year as local demand holds up amid a global recession, Finance Minister Palaniappan Chidambaram said.
``There will be a slowdown in India and steps taken and those that will be taken, to a large extent, will compensate the factors causing the slowdown,' Chidambaram told the World Economic Forum's India Economic Summit in New Delhi today.
The Harvard-trained minister signaled interest rates will come down in Asia's third-largest economy and said he will examine further excise duty cuts to spur consumer spending. Record crop plantings by India's 400 million farmers will also boost rural incomes, Chidambaram said.
India's economy may slow to 7.5 percent in the year ending March 31, after expanding 9 percent or more annually in the previous three years, according to the central bank. India's government wants to sustain growth rates above 9 percent to cut poverty in the world's most-populous country after China.
``To sustain 9 percent growth, you need international economies to turn around as well,' said Jai Sinha, partner and co-head, India, at Booz & Co., a global management consulting firm. ``International capital flows into infrastructure and exports must pick up.'
Export makes up about fifth of India's $1.2 trillion economy. Chidambaram said any shortfall in shipments and overseas investment will be ``compensated' by spurring demand in the local economy.
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