New Delhi, Oct 8 (IANS): India's economic growth and investments will pick up in the second half of the current financial year after slumping to a near nine-year low of 5.5 percent in the April-June quarter, Finance Minister P. Chidambaram said Monday.
"GDP growth was 5.5 percent in the first quarter. I expect it to be better in coming quarters," the finance minister said at the annual Economic Editors' Conference here.
Chidambaram said investments are likely to pick up in the third and fourth quarter of the current financial year following the recent economic reforms measures announced by the government.
He said domestic as well as foreign investments would help boost economic growth. "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. "I am going to do my best to help bring the change," he said.
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, he emphasised that India, despite some 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.
"Our foremost task is to augment savings, and then challennelise these savings into investments," the finance minister said, assuring every step possible to put the Indian economy back on the high growth path.
"India's growth story remains strong."
Chidambaram said India fared better than the global economy, which saw the growth drop from 5.3 percent in 2010 to 3.9 percent and 3.5 percent during the next two years. The advanced economies also logged a growth 3.2 percent, 1.6 percent and 1.4 percent.
"India was not immune," he said, adding: "It will do well to remember that out of eight years it is only during two years -- 2008-09 and 2011-12 -- our economy grew at less that 7 percent."
He said the tight monetary policy of the Reserve Bank of India (RBI) to tame inflation had dampened growth. "But there is no cause for gloom or despondency."