New Delhi, India: November 18,2008, IR Summary/Agencies/Reuters – Indian Finance Minister Mr. Palaniappan Chidambaram has revealed to the World Economic Forum's India Summit on Tuesday that the government will take all necessary steps required to encourage the economy to counterbalance the impact of the global economic slowdown and also anticipates good growth at the end of the fiscal year.

To achieve the results, India has already cut interest rates and has taken a series of measures to improve liquidity in its banking system after the credit crisis spilled into its markets in October.

"We will take steps to stimulate the domestic economy to compensate for the downside caused by the downturn in the world economy," Palaniappan Chidambaram told the World Economic Forum's India Summit on Tuesday.
Chidambaram said India was likely to end the year with a satisfactory growth rate, despite the downturn in advanced economies, although he declined to put an exact number on the expected rate.

"Next year, we will bounce back to a much better growth rate," he said, adding growth could reach 9 percent by the second half of fiscal 2009/10.

India has grown at an annual rate of 9 percent or above for the past three years but is expected by many private economists to grow at about 7 percent this fiscal year to March 2009, as per Reuters.

Chidambaram said Asia's third-largest economy could miss its annual export target of $200 billion for this fiscal year as the slowdown in developed nations trims overseas demand.

He urged companies to cut real estate prices and prices of goods such as cars as a way to stimulate domestic demand, saying state-run banks had assured him they were ready to lend to borrowers.

He said it would be good if interest rates trended down although he cautioned that India had still not quite licked the problem of subduing inflation.

Chidambaram said he would be meeting the Reserve Bank of India governor later on Tuesday.