Going by the indications of all the sectors of the economy in the first two months of the current year, growth during this fiscal would be better, he said, addressing the Indian Chamber of Commerce in Kolkata.
Chidambaram said the UPA government had set itself a target of achieving eight per cent or more growth. "Some day, the growth rate would touch the double digit mark," he said.
The Finance Minister noted that huge investments were required to achieve higher rates of growth, adding that the government would try to remove all the obstacles, which impeded capital formation.
Crediting the past NDA government for putting the economy back on the growth path, the finance minister said the present UPA coalition would also try to prevent any downslide taking place, which might pull down the growth rate.
He said growth of the agricultural sector, especially irrigation, was a key issue to achieving overall progress. The government had announced several schemes for improving irrigation facilities so that the sector registered a high growth rate of four per cent.
Chidambaram said that the state governments should also recognise the fact that more investments should flow for higher growth.
Saying that there was a need for a well functioning banking and capital market systems, the finance minister said that savings should not be directed towards the bank only, but also towards equities.
The finance minister said that all sources of capital, including foreign, should flow to India under regulated conditions, which would step up the level of investments. He called for higher savings rate, which would also translate into higher investments.
Going forward, the finance minister said that besides high dose of investments, the efficiency of converting them into output should also be increased, commonly called as the incremental capital-output ratio.
He said that for this purpose, there was a need for good corporate governance both in the public and private sectors.
The finance minister said that entities, which were destroying capital, should be punished. Chidambaram also said that there was a need to address rural poverty.