India can face US tapering, Chidambaram tells Davos meet

22 January 2014

Finance minister P ChidambaramFinance minister P Chidambaram today assured investors at the World Economic Forum in Davos, Switzerland that India is prepared to face the impact of US Federal Reserve  tapering, and the country is poised to clock 5 per cent growth in the current fiscal and over 6 per cent a year after.

The Indian economy has "stabilised and it is poised to return to high growth path and step by step we will go back to 8 per cent growth rate", he said.

India's growth rate slipped to a decade-low of 5 per cent in 2012-13 fiscal.

Talking about the impact of calibrated tapering of bond purchases by the US Federal Reserve, Chidambaram said, "We have done a lot of preparatory work. There will be some consequences on emerging economies but I think we are better prepared now to face the taper."

The Federal Reserve has announced trimming of its $85 billion monthly stimulus after US economic indicators improved.

"Fiscal consolidation has taken place, there's more FDI (foreign direct investment) flowing into India. We've added to our reserves, the rupee is stable and a number of other measures have been taken to bring stability into the capital market," he said.

Meanwhile, more than 2,500 leaders including chief executives of top companies and experts from banking, academics, social work and political spheres as well as heads of states reached Davos today to mark the beginning of the 44th World Economic Forum annual meet, also being attended by over 100 Indian delegates.

Conflict in Syria and Iran's return to global economic tables are likely to hog limelight at this year's talk-fest of the rich and powerful from across the world. Indian ministers and corporate leaders will highlight the continuing relevance of the Indian growth story at a time when the world economy is limping back to normalcy.

Heavy snow has covered this entire town in white hue, but the mood is not that gloomy as was seen in the past few years.

This year's meeting theme is 'The Reshaping of the World: Consequences for Society, Politics and Business'.

Hundreds of top executives will discuss the state of global economy among themselves, besides deliberations among around 40 heads of government at this annual WEF meeting for next four days in this small Swiss skiing resort town, the highest city in Europe.

Being held in Davos for the 43rd time, economic issues and hardcore business matters will take maximum talk-time, while Syria problems, Iran's nuclear deal as also the eurozone's future are expected to grab attention.

Heads of states or governments from countries including the UK, Australia, Japan, Iran, Israel, Brazil, Italy, South Korea, Mauritius and Switzerland, are expected at the meet.

Today's highlight is expected to be the keynote address by Japan's Prime Minister Shinzo Abe.

From India, finance minister P Chidambaram is accompanied by several key members of cabinet and government, including commerce minister Anand Sharma, Planning Commission deputy chairman Montek Singh Ahluwalia, urban development and parliamentary affairs minister Kamal Nath, heavy industries and public enterprises Minister Praful Patel, power minister Jyotiraditya Scindia and Maharashtra chief minister Prithviraj Chavan would also be present.

Apart from WEF engagements, Indian leaders are expected to hold bilateral and multi-lateral meetings with their counterparts from other countries and with top corporates.

Prominent names from corporate India expected at the meet include Tata Group chief Cyrus Mistry, Reliance Industries chairman Mukesh Ambani, Wipro's Azim Premji, industrialists Adi Godrej, Gautam Adani, Rahul Bajaj, Sunil Mittal, Prashant Ruia, Shivinder and Malvinder Mohan Singh, G M Rao, Pawan Munjal, Naresh Goyal, bankers Naina Lal Kidwai and Uday Kotak.

Infosys vice chairman and Confederation of Indian Industries president Kris Gopalakrishnan is one of the co-chairs of the WEF.

However, industry captains like Chanda Kochhar, Anand Mahindra and Kumar Mangalam Birla, who are generally regulars at the meet, have skipped the event this year.

Over 2,500 participants from about 100 nations, including 1,500 business leaders are expected this year, as per WEF.

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