I've done more heavy lifting than RBI: Indian Fin Min

Written by Ansuya Harjani | Reporting by Susan Li
India Fin Min: Don't dimiss our 4.9% growth

India's economic growth will pick up to 6 percent in the current financial year, said Finance Minister P Chidambaram, adding that the government is largely responsible for putting the economy back on a more stable footing.

"I've done more heavy lifting in the last 12 months than the RBI [Reserve Bank of India]," Chidambaram told CNBC on the sidelines of the Asian Development Bank's annual meeting in Kazakhstan.

Reserve Bank of India Governor Raghuram Rajan has received much acclaim for restoring financial stability and regaining investor confidence following an unprecedented capital flight during the summer of 2013, which was triggered by concerns over the Federal Reserve scaling back its monetary stimulus.

Chidambaram, however, points to his progress in bringing the twin deficits – current account and fiscal - under control.

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"I have laid out a new fiscal consolidation path [and] set tough limits on the fiscal deficit. I've not only achieved those targets but I've bettered those targets," he said.

In his interim budget in February, Chidambaram said the fiscal deficit would not cross 4.6 percent of gross domestic product (GDP), revising an earlier target of 4.8 percent. The deficit last year stood at 4.9 percent of the country's GDP.

Growth engine revving up

Chidambaram expects the country's economic growth to hit to 6 percent in fiscal year 2014-2015, up from an estimated 4.9 percent in the year ended March 31, 2014.

India's Finance Minister P. Chidambaram.
Saumya Khandelwal | Hindustan Times | Getty Images

"We have unblocked a very large number of projects which had stalled," he said. "When the projects are completed and they begin production you will see all that adds to the economy."

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Last August, he announced that 36 stalled projects in oil, gas, power, road and railways sectors were cleared.

Inflation concerns

Chidambaram says inflation continues to be a concern, but notes that price pressures are a result of supply side constraints.

"I have done what needs to be done on the fiscal side, the central bank has done what it needs to do on the monetary side, now we have to address the supply side constraints," he said.

India's annual consumer price inflation in March quickened to 8.31 percent from a 25-month low of 8.10 percent in February, keeping pressure on the central bank to keep interest rates elevated.

Elevated inflation has prompted RBI Governor Rajan to raise the benchmark interest rate by 75 basis points to 8 percent since taking over the central bank in September.