Disputing the CSO growth figures that ignored signs of turnaround, Finance Minister P. Chidambaram today exuded confidence that economy would clock higher 5.5 per cent growth in the current fiscal and 6-7 per cent in 2013-14.
"While 5 per cent growth rate of CSO is low and is a matter of concern...we believe growth will be closer to 5.5 per cent rather than CSO's estimate of 5 per cent...it is possible to get back to that growth path provided we follow prudent and sound policies, invest in our economy, stimulate demand, encourage entrepreneurship and risk taking", he said.
The Minister, who was on a whistle-stop tour of the financial capital, launched the Rajiv Gandhi Equity Savings Scheme (RGESS), IL&FS's Infrastructure Debt Fund (IDF) and new stock exchange MCX-SX. Besides, he also attended programmes organised by State Bank of India and Punjab National Bank.
Chidambaram said the green shoots were visible and with prudent and sound policy "we can recapture the magic of 2004-08. The average growth was 8.5 per cent during that period."
The Minister further said that Central Statistical Organisation's (CSO) estimate of 5 per cent for 2012-13 was not the lowest of the decade.
"It is still higher than the two record lows of 2000-01 and 2002-03. There are signs of upturn and that will take us back to high growth path," he added.
Chidambaram said, "Why should we, without any reason, denigrate our own performance and record? I have no doubt in my mind that we will come out of trough and we will climb back to growth rate of between 6-7 per cent next year and then between 7 and 8 per cent in the year after."
Appearing to fault the CSO's methodology, Chidambaram said the estimate of 5 per cent growth by CSO is rather based on 'dated data'.
"In the second half (of current fiscal) there are indications of green shoots in the economy", he added.
The CSO has extrapolated data for April-November into the year, he said, adding, "while that would be normally correct when the trend line continues in the same direction, when the trend line changes, extrapolation is not the method that the institution should follow to project the future.
"We believe that the upturn has begun, it is a very low curve, it's not V-shaped upturn. It's perhaps a very long and shallow U but we believe that the upturn has started and we believe that in the second