New York, Oct 28: Finance Minister P Chidambaram has said India can achieve higher economic growth, but stressed the need for streamlining the core financial sector.
''It's not possible to achieve nine per cent or more growth without reforms in the financial sector,'' Mr Chidambaram said.
''I'm aware that all our reforms will depend upon financial sector for growth from 8 per cent to 9 per cent and then 10 per cent.'' The country has averaged a growth rate of 8 per cent for the past three fiscal years.
Mr Chidambaram was addressing a meeting on ''Indian Financial Markets'' organised by the Asia Society and the Confederation of Indian Industry on Thursday which was attended by investors and analysts.
He said, ''We cannot do certain things in a democracy that are not acceptable to the public. Big bang reforms may be necessary sometimes; but they might cause sudden death in our (democratic) political system.'' He pointed out that the Bombay Stock Exchange's benchmark Sensex, which stood at 4,848 points, when the current coalition headed by the Congress party took power about two and a half years ago, is now hovering over 12,700.
Mr Chidambaram said the government was keen on making Mumbai as the regional financial centre. An expert constituted for the purpose would submit its report by the end of November, he said.
The government planned to bring legislation in the winter session of Parliament beginning November 22 with regard to the raising of foreign investment in the insurance sector from 26 per cent to 49 per cent.
India needs an investment of 320 billion dollars to improve infrastructure over the next five years. Though the government could raise about 200 billion dollars on its own, the remainder should most likely come from overseas, he said.