Finance minister P Chidambaram on Friday rejected suggestions
that India is imposing restrictions on investments and said the country’s
economy is opening up in a gradual manner. “I think the right way to look
at it is we are not restricting. We are opening up in a gradual manner. Where
were we in 1991. What are we today, in 2013? In the space of 22 years we have
opened practically 90 percent of India’s economy,” Chidambaram told the popular
Charlie Rose Show in an interview.
“There are still some areas which are
closed or which are restricted. But they will open up. But the areas that are
being opened up are so large, all this manufacturing. Steel, power, roads,
airports, seaports, all this is open. Therefore, there’s a huge opportunity for
investors,” he emphasised.
Observing that India has opened up 90
percent of its economy in the 22 years of liberalisation since 1991,
Chidambaram said that the country could become a “giant economy” if it grows at
eight per cent continuously the for seven-eight years. “See, our savings rate
in the worst year was 30 percent. In the best year, was 36 percent of GDP. Pick
any number between 30 and 36 for incremental capital output ratio, what
economists call ICOR, is about 4. Our potential growth rate is about 8
percent,” Chidambaram said.
“If we continue to grow at 8 percent for,
say,7 or 8 years or ten years, like China did at 10 percent for over ten years,
it compounds, and we become a giant economy,” the finance minister said.
Chidambaram is currently in Washington to
attend the annual Spring meeting of the International Monetary Fund (IMF) and
the World Bank.
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