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Reserves to go up by $9 B in 2005: FM
By agencies
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Monday, 10 October 2005, 19:30 IST
CHENNAI: Union Finance Minister P Chidambaram has pegged the country's reserves to go up by an additional $9 billion this year even as the trade deficits were expected to be over $50 billion.
Allaying fears about rupee valuation, he said there was no need to worry about the reserves declining. ''Perhaps there will be an addition of $9 billion this year,'' he said at the 47th CAPEXIL award function here yesterday.
''We expect the trade deficit to be over $50 billion this year but India can take this in its stride,'' he said, citing a robust economy and the enormous energy among service providers and exporters, as the reasons.
Expressing happiness that the export community was doing well, Chidambaram said there was 23 percent rise in exports in Dollar terms while imports had gone up by 37 percent. Though the merchandise trade deficit appeared very large, close to $14 to $15 billion in the first quarter, there was no cause to worry.
India could confidently hold its head up. Though it was recognized as the second fastest growing economy in the world, he cautioned exporters to catch up with China as the latter's trade surplus would be $100 billion this year.
With India virtually ahead of many Asian countries, it was sure to catch up with the giant economies of the world. Being invited to G-7 meet only asserted the country's significance on the global plane. India would get her rightful place in the high table and G7 would become G-11 with the recognition of India as a major economy in the world.
The first quarter growth of 8.1 percent had overshot his estimate of seven percent. Seeing a huge opportunity in exports, he was confident of the second quarter showing ''as good'' a growth as the first.
This was despite natural calamities like floods in Maharashtra, Mumbai and Gujarat. ''All this shows the enormous resilience of Indian economy.'' The monsoons had been good as against 13 percent deficiency last year, indicative of increased demand, production and export surpluses.
India's export growth was on a higher growth path due to the government's initiatives to accomplish accelerated export growth in the coming years. Five working groups and three special study groups on specific areas of Indian exports had been set up to further boost the country's exports, he noted.