Goal is to bring inflation down to 4%: FM

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Addressing the Bankers Conference in Hyderabad, the Finance Minister, P Chidambaram struck a note of caution and said that there are signs of overheating in some sectors and banks must focus on moderating credit growth and rebalancing their portfolios.

 

The Finance Minister, P Chidambaram said that the manufacturing sector growth will match that of the services sector. He adds that he is confident of over 8% GDP growth in FY07.

 

Chidambaram also states that signs of overheating in some sectors are a worry and inflationary signals are the most worrying signal. According to him, it is time for banks to rebalance their portfolios.

 

Moreover, he mentions that the banking sector must moderate credit growth to sectors showing overheating. He also says that the increase in repo rate signals that the government is willing to take measures for the same.

 

He further states that their goal is to bring inflation rate down to 4%.