India's finance minister said Thursday he expected the economy to post steady growth and for foreign retailers to invest within months, dismissing a gloomy prediction by the International Monetary Fund.

The IMF's latest World Economic Outlook on Tuesday reduced its forecast for India from 5.6 to 3.8 percent this year, in ominous news for the Congress Party-led government, which must call elections by the end of May.

But Finance Minister P. Chidambaram, visiting Washington for annual IMF-World Bank meetings, insisted India was seeing "early indications of recovery."

Chidambaram, addressing the Carnegie Endowment for International Peace, said he expected his country "will grow at over five percent and perhaps closer to 5.5 percent" in the year through March 2014.

"I know that the World Economic Outlook report does not share my optimism, but I may tell you that we do not share their pessimism," he added.

"Set against the current global economic background, even a growth rate of five percent looks good."

India's economy grew by 5.0 percent in 2012-2013, the slowest annual rate in a decade as stubbornly high inflation, weak demand for exports and low business confidence took the shine off once-bigger figures.

In a drive to seek outside investment, Prime Minister Manmohan Singh's left-leaning government loosened regulations to allow foreign retailers to take up to 51 percent stakes in joint ventures.

"I am confident one or two multibrand retailers will enter India before the financial year is out. In fact, I think one is just at the doorstep," Chidambaram said.

'Foreign investors are Oliver Twist'

But despite India's potential market of 1.2 billion people, no foreign retailers have applied to open shop.

US behemoth Walmart said Wednesday it was ending a partnership with local firm Bharti, blaming in part the government's conditions on foreign direct investment.

"I think foreign investors are Oliver Twist, always asking for more," Chidambaram said, without specifically mentioning any companies, and praising India's democracy in contrast to China's authoritarian model.

He said the cabinet had made changes in response to investors' concerns.

"A genuine investor must work within that policy. It may not be the ideal policy from his point of view, but it is the policy that we have today," he said.

The main opposition Bharatiya Janata Party has attacked Congress as being unfriendly toward investors. But the Hindu nationalist party has held out the possibility of scrapping the retail rules if it takes power, saying that foreign giants could devastate a traditional sector of the economy.

Chidambaram said he hoped the economy would see fruits from reforms in the second half of the financial year.

In other signs he cited for optimism, Chidambaram pointed to a pick-up in exports in the three months through September, a rise in freight traffic and strong rainfall. Nearly two-thirds of Indians count on agriculture for their livelihoods.

India has been hammered in recent months by stubbornly high inflation and a sharp depreciation of the rupee. The currency plunged when Federal Reserve chairman Ben Bernanke indicated in May that the United States would stop pumping the monetary system with cash, an emergency policy to revive the economy after the 2008 crisis.

Chidambaram said he expected the since deferred US taper -- which prompted fears that capital would flow out of India -- to take place in December or January but that the effects would be limited.

"The market has more or less factored the consequences of the taper," he said. "The May 22 announcement took everybody by surprise and therefore the consequences were rather harsh."

Chidambaram said that the Fed was aware it should have communicated better. The US central bank's last policy meeting ended with a surprise decision not to start winding down the stimulus program immediately.


Publishing Services International Limited (PSIL) is the publisher and operator of a worldwide network of online news sites dedicated to delivering fair, accurate and relevant reporting from a variety of the world’s most trusted sources – from the biggest cities to the smallest towns.

We deliver positive and powerful messages to our readers, providing up‑to‑the‑second news that matters to the individual.

Our promise is to serve communities and individuals worldwide, delivering information that hasn’t always been available to them. We will give them back a voice – a voice that’s empowering because it is theirs – and provide a platform to communicate between themselves and the world.

We believe people are not just generic demographics; they are individuals with their own preferences and curiosities. We are about understanding these individuals, listening to them, and serving them.

We are the new pioneering spirit of news – we’re not talking to everyone, we’re talking with every one.

If you want your news, your voice, your way, on your time – we’ve got news for you.




If you have any questions or concerns please email us on


  • Australia, Toll Free 1-800-983-421
  • Hong Kong, Toll Free 800-906-187
  • Singapore, Toll Free 800-852-3871
  • USA/Canada, Toll Free 1-800-830-4132

Advertise With Us

Interested in being awesome?
Contact us by email or phone.