'India’s growth story remains strong'

New Delhi, Oct 8: Even though Indian economy’s growth declined to 6.5% in 2011-12 and further to 5.5% in the first quarter of this fiscal, it is no cause for undue worry, finance minister P Chidambaram said on Monday. “These are challenging times for global economy. They are affecting market sentiments everywhere,” the finance minister said in his opening remarks at the annual Economic Editors’ Conference in Mumbai.

“Our foremost task is to augment savings, and then challennelise these savings into investments,” he said, assuring every step possible to put the Indian economy back on the high growth path.

“India’s growth story remains strong.”

Chidambaram said India fared better than the global economy, which saw the growth drop from 5.3% in 2010 to 3.9% and 3.5% during the next two years. The advanced economies also logged a growth 3.2%, 1.6% and 1.4%.

“India was not immune,” he said, adding: “It will do well to remember that out of eight years it is only during two years — 2008-09 and 2011 11-12 — our economy grew at less that 7%.”

He said the tight monetary policy of the Reserve Bank of India (RBI) to tame inflation had dampened growth. “But there is no cause for gloom or despondency.”