NEW DELHI: India's economy, which swelled close to a trillion dollars last year, is actually worth four trillion dollars when measured in terms of purchasing power parity (PPP) and accounts for 6.3 per cent of the global economy, Finance Minister P Chidambaram said.At market prices GDP has increased from USD 20 billion in 1950-51 to USD 912 billion in 2006-07 and is expected to cross a trillion dollars in the current year, he said, delivering a speech 'India's Socio-Economic Agenda: Development with Democracy' at the Norwegian Nobel Institute in Oslo.

PPP is a measure of the purchasing power of different currencies and the average cost of goods and services between countries.The Finance Minister was on three-day visit to Norway.Claiming that Indian growth was no more a jobless growth story, he said since 2003-04 the average growth rate has increased further to 8.6 per cent and has seen over one crore jobs added annually.During 1999-2000 to 2004-05, India added about 12 million people to its workforce each year.

In this period, the rate of growth of employment was 2.9 per cent per year, he said. India, after China, is the fastest growing economy of the world, and together with Brazil, Russia and China is the locomotive driving world growth, said Chidambaram.

Expressing the government's commitment for inclusive growth, he said the proportion of people living below the poverty line in India has declined from 51.3 per cent in 1977-78 to about 22 per cent in 2004-05.Earlier, he met his Norwegian counterpart Kristin Halvorsen and the Norwegian Minister of Environment and International Development. Both the countries also decided to step up their bilateral and economic relations. He also expressed his concern over what should India do to maintain its growth.High economic growth in India and resultant inflow of funds into the country are putting pressure on rupee, besides posing a risk of increase in inflation."Strong economic performance in the framework of an open economy has thrown up its own challenges.

We face the challenge of abundant international capital flows and their impact on the domestic economy, particularly on prices and the exchange rate," Chidambaram said at Norwegian School of Management.The economy grew at 9.4 per cent during the last fiscal and 9.3 per cent in the first quarter this year, encouraging foreign funds to infuse over Rs 12,500 crore in the stock markets in the year so far. The rupee has appreciated by over 12 per cent against the dollar since January.Inflation had crossed six per cent level during the year, but was ruling at its 5-year low of 3.07 per cent for the week ended October 6.

Risks remain to potential inflation, according to the RBI.Delivering the speech titled 'Road traveled and the way forward,' Chidambaram said that on the demand side, higher growth in foreign reserves -- which were estimated at over 239 billion dollars at the end of last month -- and robust credit growth have exerted pressure on prices.

"From time to time, we are faced with a mismatch between supply and demand in the case of primary commodities, including food articles," Chidambaram said.The central bank has played its part in containing demand side pressure on prices and the government, on its part, has responded to such developments by moving further on the path of economic openness by increasing access to the external markets.

There are indications that on the agriculture front some of the supply side constraints may be eased in the current year, Chidambaram said. On the whole, despite occasional spurt in prices, growth has come about with modest inflation, he added.Chidambaram further said that although the country has been witnessing robust economic growth, it has to deal with numerous, almost formidable challenges. India ranks low at 126th position in the world according to the Human Development Report, 2006, he pointed out.

"Many of the Millennium Development Goals appear, at present, just beyond our reach by the year 2015," the Finance Minister said. "We still have many children out of school and many more children do not complete five or eight years of school education. We still have many mothers who deliver babies without institutional care."

"We still have to provide electricity and roads, drinking water and sanitation, and schools and healthcare facilities to thousands of villages. We still have to create millions of jobs that will provide decent employment and fair wages to our youth. We still have to deal with endemic diseases such as diarrhoea, tuberculosis and malaria," he said.