Speaking at BanCon 2005, Chidambaram said, "The farm sector, unlike last year, has shown a smart pick up, and the industrial growth has strengthened along with the services sector."
He added that an inflation of 5 per cent was unavoidable due to the rise in fuel prices. Speaking about the banking sector, Chidambaram said banks will have to raise Rs 60,000 crore (Rs 600 billion) as additional capital in the next five years.
He said the issue would be discussed at the meeting of the bank CMDs convened on November 18.
Banks, which did not have the scope to raise Tier-I capital, would have to go for Tier-II capital, he said, adding the additional capital could be raised by way of improved profitability, better recovery or raising funds from the market, the finance minister said.
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