The Finance Minister P Chidambaram, speaking at the Economic Editors' Conference stated that despite the global meltdown, India, unlike many other global economies, would continue to grow at seven to eight per cent this fiscal. It was nowhere near a recession.

He declared the growth to be 'moderate' in current financial year to March 2009 but he was confident it would rebound in the second half of the next year. He forecast the growth for Asia's third-largest economy of seven to eight per cent for this year, which would make it the second-fastest-growing major economy globally after giant neighbour China, whose economy has also been slowing.

Further emphasizing, he added that the global scenario was still grim, but there was a silver lining for India as the situation would provide it an opportunity to review and revisit pending reforms. "As and when required, we must introduce measures, particularly in the financial sector, to make our economy more competitive and the economic regulatory and oversight system more efficient, quick and responsive to global developments". Reacting to questions on interest rates, he said that many public sector banks had already reduced the rates for home loans by 75 basis points. "However, I cannot give any advice to private sector banks."

Although a counter view economists expect the growth rate to be as low as 6.8 per cent this year and 5.5 per cent next year. The Congress-led government is anxious to ensure the domestic economy stays on track with national elections due by May 2009. Analysts have been warning that India, whose combined federal and state deficits are already among the world's highest, was set to overshoot its deficit targets as a result of spending to weather the crisis.

But Mr. Chidambaram was very optimistic and opined that the slowing inflation could open the door to more interest rate cuts to spur the economy.