Slowdown of US economy would impact India: FM

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Gurgaon, Jan 17 (UNI) Finance Minister P Chidambaram today conceded that a slowdown in the United States economy would have an impact on India, but said that the government will take counter measures to offset this.

Addressing the Partnership Summit 2008 here, Mr Chidambaram said the government will give highest priority to maintaining high growth in the next 10 to 15 years.

This, he said, would be possible in view of the high savings and investment rates.

The saving and investment rate is in excess of 35 per cent of Gross Domestic Product (GDP), fuelling GDP growth.

The Finance Minister said that inclusion was a key agenda of the government which will be implemented by a sustained four per cent growth in agriculture, stepping up expenditure for the development of rural areas as well as higher spending on social sectors such as health and education.

Avowing to government's commitment to sustain four per cent growth in agriculture, Mr Chidambaram said both the area and productivity of major crops like wheat and rice have stagnated over the last ten years.

''The need is to increase area under cultivation and productivity of these crops,'' he said.

Talking about growing inequalities in the system, Mr Chidambaram said this was inevitable in view of the fact that both industry and services were growing at double digit, while this level of growth was difficult to achieve for the farm sector.

Referring to the fact that 60 per cent of the country's population is still dependent upon agriculture, Mr Chidambaram said a huge workforce needs to move out of this sector which would require rapid growth of industry and services. A mere 10 to 20 per cent population is sufficient for deployment in the agriculture sector, he said.

The Finance Minister explained how the government was able to meet its commitments for the social sectors. He said high growth has enabled buoyancy in revenues enabling the government to undertake larger expenditures on areas like health and education.

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