NEW DELHI, MARCH 15: Outgoing finance minister P Chidambaram on Sunday said growth rate this financial year would still be at a `respectable' five to six per cent which he said was a `reassuring sign' in the backdrop of the high political uncertainty leading to mid-term elections.In a statement listing the major achievements of the United Front government and the problems and challenges ahead, Chidambaram said, "We struck a serious blow against smuggling and the associated illegal transactions by liberalising the import policy.""The fact that the hawala premium on the US dollar has dropped from a range of 10 to 15 per cent a few months ago to two per cent in recent weeks is an encourging measure of success,'' he said.He listed the infrastructure sector, financial sector and public sector as three areas which needed the immediate attention of the new government to make the Indian economy internationally competitive and an efficient generator of growth. These goals could be achieved only if somesubsidies were scaled down gradually while maintaining some others like fertiliser and food, he said.On the external front, Chidambram said the new government would have to cope `imaginatively' with the new challenges posed by the continuing South East Asian crisis."The key to self-reliance and a strong balance of payments is sustained rapid growth of exports,'' he said, adding, "The last but not the least important task is legislation.''Many of the bills were ready and when adopted they would transform the legal landscape of India's economy. The next government should press ahead with these bills, he said.He felt that the social sector particularly services like health and primary education deserved larger funds. Elaborating on the growth rate, Chidambaram said the first year of the United Front government saw it touch 7.5 per cent.An average five per cent inflation rate was the lowest in the last 12 years, he said adding the track record of rapid economic growth and low inflation were the`surest ways of raising the living standards of the people and eliminating the curse of poverty'.This track record of strong growth and low inflation was greatly helped by the exceptional achievements in overall savings (26.1 per cent of GDP) and investment (27.3 per cent of GDP) attained by the Indian economy in 1996-97.Because of the prudent policies of the United Front, he said foreign exchange swelled by $ 7 billion to reach $ 24 billion and the ratio of India's debt service to current receipts and of external debt to GDP declined during its 21-month-rule.
