He said that there is no cause for the panic that seems to have gripped the currency markets and that is feeding into other markets.
"There is widespread concern about the volatility in the currency markets. I may point out that all emerging market economies appear to be affected by such volatility. Thanks to the global slowdown as well as some domestic factors, the Indian economy is challenged. In the last twelve months, the Government has taken a number of measures to contain inflation and to revive investment and growth," Chidambaram said while addressing a press conference here.
"Some results are visible, yet there are many challenges that have to be overcome. Growth slowed down to 5 percent in 2012-13 and we expect that the growth trend will remain flattish in the first quarter, but even so we are in better health than many other countries of the world. Therefore, there is no reason for excessive or unwarranted pessimism," he said.
The Finance Minister said: "We expect that growth will pick up in Q2 to Q4. Supporting this are increase in sown area by about 9.1 percent; acceleration in the pace of Plan expenditure; and impact of the projects cleared by the CCI in the last few months."
Speaking on the measures taken by the Reserve Bank of India, he said: "Some measures taken recently by the RBI have been the subject matter of different interpretations. We wish to make it clear that these measures were taken to reduce volatility in the markets and to quell speculation on the Indian rupee. There was - and is - no intention to introduce any type of capital control, including controls on repatriation."
He said: "It is not the policy of the Government or the RBI to resort to capital controls or reverse the direction of capital account liberalisation. The measures that were taken last week will be revisited as stability returns."
--IBNS (Posted on 23-08-2013)