Growth to be satisfactory, inflation to ease: Chidambaram

New Delhi, Dec 1 (PTI) Before leaving the Indian Finance Ministry to assume charge as Home Minister, P Chidambaram Monday exuded confidence that inflation will further moderate and growth will be satisfactory despite a slowdown even as there is unfinished work in the economic sphere.

Chidambaram also said Indian Prime Minister Manmohan
Singh can guide the economy far better than anyone else, given
his exceptional background, and the economy will clock a
growth rate of 7-8 per cent this fiscal, despite the global
financial crisis.

"There is unfinished work in this (Finance) Ministry.
The whole country is extremely reassured, speaking personally
I am more than reassured with the fact that the Prime Minister
has decided to keep the portfolio with himself. At least for
the time being I am told," he told reporters at his last press
conference as India's Finance Minister.

He said in this difficult year, the country needs
close coordination between the Finance Ministry, Planning
Commission and Reserve Bank of India (RBI), and Manmohan Singh
has experience in handling all the three.

"We have in Dr Manmohan Singh a former RBI Governor,
a former Planning Commission Deputy Chairman and a former
Finance Minister ... I have no doubt in my mind that with this
exceptional background, Singh will be the guide to the economy
far better than anyone," he said.

Chidambaram said while the Indian economy is affected by
the global meltdown, it will only amount to a slowdown and
not a recession. He also said inflation will moderate.

The Indian economy recorded a growth rate of 7.8 percent
in the first half of the current fiscal, much in line with the
Government projection of 7-8 percent and the RBI's estimates
of 7.5-8 percent.

Declining for three consecutive weeks, inflation eased to
8.84 percent.

To a query, Chidambaram said there always will be an
unfinished agenda. "How can there be no unfinished agenda," he
asked.

Though he did not elaborate, the Indian Finance Ministry
is yet to carry out reforms in the pension and banking
regulations and bring out a direct tax code.

The other pending work of hiking FDI in private insurance
to 49 percent from 26 percent has been approved by the
Cabinet and the bill is expected to be introduced in this
session of the Lok Sabha.

To a query on the income tax code, he said the Central
Board of Direct Taxes will release the discussion paper on the
code at an appropriate time.

The direct tax code will replace and simplify the over
four-decade-old Income Tax Act, among other pieces of
legislation.

To another question, Chidambaram said he has spoken to
World Bank President Robert B Zoellick for doubling
lending to India to USD six billion.

India is seeking more money from the World Bank to
fight slowdown in capital inflows, and spur economic growth
through investment in infrastructure. He said India has sought
half of the additional amount by March-end and the remaining
half by June next year.

"When the Prime Minister conveyed his decision to me, I
would be less than honest if I do not say that I was
disinclined, but in a situation like the one we find
ourselves... The final call was taken by the party leader, the
Congress President (Sonia Gandhi), and the Prime Minister. I
have therefore answered the call of duty," he said.
He further said one must take whatever duties are
entrusted to one and discharge those duties. "It is in that
spirit that I leave behind this (Finance) Ministry and move to
the Home Ministry," Chidambaram said. PTI AKH
NIK