India would soon return to high growth path with several measures being taken by the United Progressive Alliance (UPA) government to reboot the economy battered by external and internal factors, P Chidambaram said on Tuesday in Bangalore. The Union Home Minister was addressing a press conference.
To a question on high food inflation and the plight of the middle class, Mr Chidambaram said the issues should not be looked from the point of view of urban middle class alone and said hike in procurement price reflected on food prices. "Higher procurement prices will reflect in higher food prices... but higher procurement prices benefits millions of farmers. if you increase the price of sugarcane, sugar cannot be cheaper... if you increase the procurement price of wheat, paddy, rice the consumer cannot pay less," he said.
He quipped people were prepared to pay Rs 15 for a bottle of water and Rs 20 for a cone icecream, but protest against rise in wheat and rice price. "You are prepared to pay Rs 15 for a bottle of water, but we will not pay a one rupee increase in the price of kilo rice or kilo wheat. We are prepared to pay 20 rupees for ice cream cone but we will not pay one rupee more for a kilo rice or kilo wheat," he said.
Giving a report card on the performance of the second UPA government in the past three years, Mr Chidambaram said despite a challenging year when developed countries the world over registered zero or no growth in 2011-12, India registered 6.8 percent GDP growth. "Compared to other countries, India continues to be a high investment destination, as a whopping $46.55 billion of foreign direct investment in 2011-12. We also continue to be a major overseas investor after the US, Britain, Canada, Germany and France. Exports contributed 22 percent to the GDP in 2011-12 from a mere 5.3 percent over a decade ago," Mr Chidambaram pointed out.
He admitted 2011-12 was a bad year during which the country achieved a GDP growth of 6.5 per cent which is "not enough" for a developing country like India where millions of people are in poverty. "We need to grow at a faster rate. We need to create more jobs," he said, adding, "India needs to grow at over 8 per cent or perhaps at 9 per cent." Despite the difficulties, Mr Chidambaram pointed out that the government has identified the problems and Prime Minister Manmohan Singh, who also holds the finance portfolio, is addressing these issues.