IndiaPost.com - Economy will bounce back: Chidambaram

CHENNAI: Asserting that economy would bounce back, Finance Minister P Chidambaram said "right attitude and patience" could help the country face the problems like soaring inflation. "Fast growing economies (like India) will face such problems.

But the right attitude, patience and grit can help us not only face the problem but also tackle it," he said after laying foundation stone for Indian Bank's new head office.

"We came out of crises like the 1997-98 Asian financial crisis and the 1989-90 foreign exchange reserve crisis.

Can't we come out of the present situation?" he said. India had bailed itself out of other crises like the "first oil shock in 1973" and the 24 per cent inflation rate in 1979-80, he said.

"Despite the growing inflation (at 11.63 per cent for the week ended June 14), banks are still issuing loans and education loans alone to the tune of Rs 20,000 crore has been disbursed to 12 lakh students in the country," he said.

He reiterated that the growing rates of crude oil had influenced prices commodities and metals, leading to overall rise and inflation. "But we can patiently handle the situation using globally accepted economic formulae," Chidambaram said.

Since India was a growing economy, it was a "different ball game" to finance a growth rate of nine per cent against the five per cent a few years back.

"Credit flow and money flow has expanded, as is the case with capital flow from abroad. Sometimes it leads to embarrassments like inflation, but we have to tackle it," the minister said.