Finance minister P Chidambaram has said that lending rates are not expected to rise in the short term. He was speaking at the the Hindustan Times' HT Leadership Summit in New Delhi on Friday. Stating that small banks were adjusting home loan rates, the FM made it clear that he expected term lending rates to remain more or less stable in the days ahead.

Linking inflation to the 150-180 per cent hike in oil rates over the past one year, Chidambaram said that the oil shock has to be looked at in the context of the increase in oil prices. "How will inflation come down? For every $5 increase in oil rates, the GDP is affected by half a per cent. He made it clear that measures - both fiscal and monetary - would be taken as and when required to moderate inflation in the country. He made the remarks in the backdrop of indications that fuel prices will remain high for the foreseeable future on account of surging demand as the winter sets in the United States.

Earlier in his remarks during a well attended session on 'vision India - the next economic superpower' at the ongoing HT Leadership Summit, the FM underlined the importance of improved tax collections in the finances of the state. "I expect more people to comply with tax laws. Direct taxes will show buoyancy", he said.

Outlining the priorities of the current UPA government, Chidambaram said that PSU disinvestment was not ruled out, but emphasised that the policy on this count would have to be reworked and reinvented. "We are facing a backlash on this issue. Surveys have shown that 60 per cent of people oppose disinvestment," he said. Similarly, on the issue of FDI, the FM said the policy that satisfies people. "A consensus is very important," he added.

Outlining his vision for the country, Chidambaram said that for India to become a superpower, a number of things needed to be done. "Five years from now, at the end of term of this government, we would like to have 30,000km of world class roads, six international airports, a dozen seaports and all children in the 5-10 years age bracket (studying in school). All villages should be electrified and connected by a road. These are the things we should be working for", he said.

On the issue of growth, the FM made it clear that he was looking at a growth rate on 7 per cent, going on 8 per cent, over the next few years. "Given good politics and good governance, we will soon have a growth rate of over 7 per cent", he said.

Stressing on the debilitating effect of poverty, the FM said that India cannot be a superpower if a large number of people remain poor. "If 26 percent of India is poor, it is foolhardy to promise growth of 10 per cent," he said and added that 10 per cent growth rate would be attained by the end of this decade.

Earlier in his opening remarks in the session, Ashok Desai, former chief economic consultant, ministry of finance said that two decades of rapid growth have raised expectations about the future of India as the next economic superpower.