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“A new trade policy will be announced in about three or four days and that will show that we are committed to reform,” said the finance minister.
Chidambaram, who is on a three day visit to Japan to promote India, was addressing a press conference in Tokyo.
“FDI flows into India are quite positive… think we can absorb, easily absorb $50 billion of FDI every year into India,” he said, adding that foreign investors continue to place confidence in India.
Chidambaram said that Indian economy was growing between five and 5.5 per cent in the just-ended financial year which he was not pleased with.
“I am not happy. We are growing at only five to 5.5 per cent… because our people require at least an eight per cent growth,” he said, adding India’s potential growth is seven per cent a year.
Speaking about the BRICS Bank announced in Durban, the Indian finance minister said, “Why do we need the bank? Because, the funds that are now available through the existing multilateral institutions are insufficient. The World Bank, the ADB, provide funds but (they are) insufficient,” he said.
He also added that the new entity proposed by the developing economies will cooperate with the existing institutions like the Asian Development Bank saying, “The BRICS bank will not be a competitor for the World Bank or the ADB. It will complement the World Bank or the ADB.”
“We have to sort out many internal issues. We have to contain fiscal deficit. We have to tame inflation. We have to find ways in which projects are executed on time and efficiently.
“We are addressing these problems. These in my views are biggest challenges facing India today”, said the finance minister.
The government plans to open up the pension sector to foreign investors, and raise the investment limit in the insurance sector to 49 per cent from 26 per cent.
“The current account deficit is indeed large and a matter of concern,” said Chidambaram.
“For 2012-13 (it) has been fully financed by foreign exchange inflows, without touching our foreign exchange reserves. In fact we may have even added to our foreign exchange reserves,” he said.
Chidambaram said that the Indian economy was expected to grow 6.1 to 6.7 per cent in the current fiscal year, an improvement on the estimated 5.0 to 5.5 per cent growth recorded last fiscal year, a figure the minister said he was not satisfied with.
With inputs from agencies