New Delhi, Oct 8 (IANS) A resolute Finance Minister P. Chidambaram Monday made it clear that the government, despite domestic political opposition, would usher in more economic and financial reforms to rev up growth and investment.
"Without reforms, we risk a sharp and continuing slowdown of the economy, which we cannot afford given the imperative need to generate jobs and incomes for a large population, most of whom are young," Chidambaram said at the annual Economic Editors' Conference.
India's economic growth slumped to a near nine-year low of 5.5 per cent during the first quarter of the current fiscal. The gross domestic product rate was 6.5 in 2011-12.
He said it is legitimate on part of political parties to oppose but they should not obstruct decision-making. "Every government is entitled to lay down policies. Opposition to policies is legitimate, obstructionism is not," he said.
"The government of the day must be allowed to lay down policies, pass legislations wherever necessary, and get on with the job of implementing those policies."
He said with reforms investments are likely to pick up in the third and fourth quarter and predicted a return to average growth of about 8 percent during the next five years.
"Once domestic investments pick up and the foreign investments come in, the situation will improve."
Chidambaram said the government would take all possible steps to improve business sentiments and boost investments.
"Our foremost task is to augment savings, and then channelise these savings into investments," he said, assuring every step possible to put the Indian economy back on the high growth path.
"I am going to do my best to help bring the change."
Defending the decision to allow foreign direct investment (FDI) in multi-brand retail and insurance, he said this should be tested on a clear assessment of the advantages that would accrue to India and not on the basis of ideology or theory.
"We must not fear foreign investments in India. We have the sovereign right to decide where and how foreign investments would be allowed into India.
"FDI in retail, aviation and FM radio broadcasting is decisions that will benefit the economy and the country."
The finance minister admitted that GDP growth in the current financial year would fall below the budgetary target of 7.6 percent, largely due to adverse global economic climate.
However, India, despite the slowdown, would remain among the fastest growing economies in the world.
"Even if we fall short of 7.6 percent target, our growth will be four times the average growth of advanced economies and twice the average growth of global economy," he said.
"India's growth story remains strong."