India firm on cutting deficits, Chidambaram tells Europe

Finance minister P Chidambaram on Monday assured European investors that India is committed to pursuing economic reforms, and the government will cut fiscal and current account deficits to help the economy return to 8 per cent growth.

Speaking in Frankfurt, Germany, at a road show on investment opportunities in India, Chidambaram said the economy was on the right path to achieve growth levels recorded during 2004-2008.

"I am very optimistic that India can grow at a (high) rate for the next 20 or 30 years," he told a gathering of around 200 representatives of leading European companies, banks and other financial institutions.

 India's promotion drive in Germany's financial capital to woo more European investors was hosted by Deutsche Bank and Barclays Bank. Chidambaram had held similar meetings in Hong Kong and Singapore last week to woo investors.

India's GDP had been growing at an impressive rate of even 9 per cent before the global financial meltdown pulled the growth rate down to 6.7 per cent in 2008-09. The growth in the current financial year has slipped further and is estimated at 5.5-5.7 per cent.

Chidambaram said that fiscal deficit and current deficit were the main problems facing the economy. Outlining the measures taken by the government to reduce fiscal deficit, Chidambaram said under no circumstances would he allow it to go over 5.3 per cent of gross domestic product (GDP) in the current financial year.

The government proposes to reduce fiscal deficit to 4.8 per cent in the next financial year.

Besides attending the road show, Chidambaram held other bilateral meetings with business leaders to promote India as an attractive destination for foreign investments. He also had a meeting with Anshu Jain, India-born co-chief executive of Deutsche Bank.