Finance Minister P Chidambaram said the Indian economy must grow at the rate of 7-8 per cent a year, and that this growth rate had to be attained subject to fiscal prudence and financial discipline.
He said it was possible to do so by staying within the broad goals outlined in the United Progressive Alliance's common minimum programme.
In an exercise aimed at restoring confidence among members of India's financial community¸ Chidambaram said it was important to "win back the confidence of the business community and allay the apprehensions of the key economic players."
The key objective of his visit was to reiterate that the government was committed to reforms, he told the Press after meeting the Securities and Exchange Board of India and stock exchange brass and leading bankers in Mumbai on Wednesday.
"I am not making any detailed statements because Parliament is in session...but to tell players that the government is committed to reforms," he said.
Chidambaram told those present at a three-hour-long meeting that he would look into the proposal to create a market stabilisation fund and to allow banks to take higher equity market exposure.
In his first meeting with bankers, brokers and the stock market regulator in Mumbai, he said the economy was looking good and there was no need to panic.
Chidambaram held meetings with Sebi Chairman GN Bajpai, Bombay Stock Exchange CEO Manoj Vaish and leading brokers Vallabh Bansali of Enam Securities and Motilal Oswal of Motilal Oswal Securities, among others.
At a separate meeting with bankers, he met State Bank of India Chairman AK Purwar, Punjab National Bank chief PS Kohli, the heads of Bank of India, Bank of Baroda, Canara Bank, and of the private sector ICICI Bank and HDFC Bank.
At his meeting with Sebi and stock exchange officials, Chidambaram discussed the risk management system and the data being collected on the May 17 crash, when the Sensex plummeted by nearly 800 points intra-day. The bankers' meeting focused on agricultural credit.
The finance minister will meet foreign institutional investors, financial institutions as well as the Reserve Bank of India Governor Y V Reddy and industrialists on Thursday.
