Speaking at the Economic Editor''''s Conference, Chidambaram said that the current account deficit is of $4.7 billion and the capital account surplus is at $15.9 billion. He also stated that the government had no plans to introduce further measures to stop capital flows.

Headline inflation has moderated on fiscal and monetary steps, Chidambaram pointed out and observed that conditions were favourable for sustained and rapid economic growth.

He also said that the consensus FY08 GDP growth forecast was at 8.5 per cent though the rising rupee, interest rates and lower business confidence were concerns and there was a need to revive consumer durables use for double-digit industrial growth. The overall macroeconomics are still strong and the economic outlook is upbeat, he said.

According to the finance minister the tax-GDP ratio was likely to reach 6.5 per cent for FY08 versus 5.58 per cent in FY07. Partial pass-through of crude price accounts for lower headline inflation and maintaining petroleum product prices at February levels accounts for lower inflation, he commented.

Newswire 18 had quoted the FM as saying that the market stabilisation scheme (MSS) borrowing cap was hiked after weighing the fiscal cost. The FM also said that no more steps were planned to curb capital flows. SEBI''''S move on P-Note was aimed at curbing capital flows in the medium-term and the liberalisation of capital accounts would continue.

Analysts said that the finance minister seemed to convey that he did not really plan to impose any further restrictions on capital flows in India. He was of the view that the policy pronouncements made by SEBI, a couple of weeks back, were enough to moderate capital flows, in terms of policy responses.

He said that he did not think that controls were in conflict with the Tarapore Committee''''s recommendations, which have advocated full capital account convertibility. In fact, he said that full capital account convertibility was an ideal situation, which could never be achieved, because there had to be some capital control. He, however, suggested a progressive movement towards fuller capital account convertibility. "There are no further restrictions as of now'''', he stated.

CNBC-TV18 shares with domain-b excerpts from the finance minister''''s address at the annual Economic Editor''''s Conference:
"I have always viewed the Annual Economic Editor''''s Conference as an important platform, for interface between the government and the fourth estate, on the salient aspects of the economy, the current economic situation, the challenges and the policy responses of the government.

"I understand that the participants of this conference form a highly diverse cross section of informed economic editors, from the length and breadth of the country. I extend a hearty welcome to all the participants and wish for meaningful discussions on the current state of the Indian economy and the government''''s economic policies, over the next two days. Such discussion will generate useful feedback to the government.

"The United Progressive Alliance government assumed office in May 2004. It is with a high sense of achievement and pardonable pride that we recapitulate the three and a half years of the management of the economy.

"There has been a marked change in the way the Indian economy is viewed, both within the country and in other countries of the world. This is largely due to the sustained, well-directed efforts of the government that have resulted in globally acclaimed rates of economic growth, increased global competitiveness of Indian businesses, strong macro-fundamentals and a highly favourable economic outlook.

"I am sure that you have carefully followed the developmental strategies followed by the government in the growth process, the shift in the government''''s approach to the goal of inclusive growth and restatement of its social and economic objectives.

"The ''''command and control'''' economy of India, grew at a rate of 3.5 per cent per annum, during 1950-51 to 1979-80. Growth, which hovered around a little over 5.5 per cent per annum, during the 1980s and 1990s, increased to 5.8 per cent during 1989-99 to 2003-04, and further to 8.6 per cent since 2004-05.

"Of late, India has been globally acknowledged as a high growth economy. The rate of growth stood at 9.4 per cent during 2006-07. The growth rate, during the first quarter of 2007-08, was an impressive 9.3 per cent, over the corresponding quarter of the previous year.

"If we can sustain this rate of growth, per capita income can double in about nine years. This high growth has been facilitated, by an unprecedented increase in the rate of investment from 22.9 per cent in 2001-02 to an estimated 35.1 per cent in 2006-07.

"According to Goldman Sachs, over the next 30-50 years, India is likely to grow fastest among the BRIC economies of Brazil, Russia, India and China. McKinsey Global Institute has predicted that India will have the fifth largest consumer market by 2025, with about 583 million people forming its middle class. This implies a huge opportunity for further investment and enterprise."

''''The rapidly changing sectoral contributions to the GDP are an indication of the significant structural changes taking place in the economy. The share of industry, in GDP, has increased from 25.6 per cent in 2003-04 to 26.6 per cent in 2006-07. There has been a decline, in the share of agriculture and allied sectors, from 21.7 per cent to 18.5 per cent during the same period.

"The declining share of agriculture in GDP has been mostly appropriated by the services sector, which increased its share from 52.7 per cent to 54.9 per cent. industry, of late, has been one of the major drivers of growth of the Indian economy.

"The last four years have witnessed impressive rates of industrial growth, averaging around 10 per cent. In 2006-07, the industrial growth was a splendid 11.5 per cent, while the rate of growth of manufacturing was even higher at 12.5 per cent.

"Though the growth of manufacturing has slightly decreased, to 10.3 per cent, during April-August 2007, the growth in capital goods is at 21.3 per cent, during the period. It is suggestive of a significant addition to industrial capacity. The slackening has been mainly on account of poor performance of the consumer durable sector.

"The growing business optimism is manifest in the bank credit to industry and large industrial investments in the pipeline. Outstanding credit, to the industrial sector, by the scheduled commercial banks witnessed a growth of 30 per cent and 28.4 per cent in 2005-06 and 2006-07, respectively.

"Year-on-year growth of outstanding credit, as on October 12, at 23.5 per cent, has exhibited some moderation from the strong pace of the previous three years. However, we should note that industry is able to access funds from other sources as well. Preliminary assessment indicates that in Q1 of 2007-08, access to resources by industry other than from bank credit increased by over 30 per cent, compared to Q1 of 2006-07.

"Internal generation of funds continue to provide strong support to the funding requirements of the corporate sector. The CMIE data on investment, in manufacturing, in the pipeline from March 2007 showed a growth of around 50 per cent over March 2006.

Besides, net FDI into India has grown from $ 4.7 billion in 2005-06 to $ 8.4 billion in 2006-07, which is an increase of around 79 per cent. FDI flows, in the current year upto June 30, 2007, have been estimated at $ 6.4 billion. Indian manufacturing has come of age and is highly competitive in the global market.

"The growing interest to invest in Indian industry is best embodied in the BSE Sensex. It has touched an all time high of 19,977 at closing on October 29, 2007. The business expectation, in the index of FICCI for July-December 2007, has also shown an improvement. Nearly 70 per cent of the respondents of the FICCI survey, found the current overall economic conditions better, than those in the preceding six months.

"India''''s external sector continued to be robust and reflected the strength of the economy during 2006-07."