Jaipur blasts won't affect investment climate: FM

BALM AFTER BLASTS: FM says country was expecting over 8 per cent growth this fiscal despite high inflation.

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New Delhi: Finance Minister P Chidambaram has said that the serial blasts in Jaipur would not affect India's business climate and the country was expecting over 8 per cent growth this fiscal despite high inflation.

"Inflation may remain high for sometime. We are still confident of clocking over 8 per cent growth this fiscal," he said.

At a time when industrial sector is witnessing signs of a slow down with a dismal three per cent growth in March, the investment climate could be vitiated by the terror attack, industry officials said.

At least, 60 people were killed and about 200 injured in eight near-simultaneous blasts in Jaipur on Tuesday night.

Investment rate in India was over 36 per cent during last fiscal. So far as foreign investment is concerned, the country received about $25 billion FDI during 2007-08 and expects to attract Rs 35 billion dollars of FDI this fiscal.

Even though FIIs were quite bullish on Indian economy, they have been net sellers to the tune of Rs 111,145 crore in the calendar year 2008 so far due to global cues.

The Finance Minister also said global conditions would lead to moderation of growth in India, but exuded optimism that it would still be above 8 per cent.

Chidambaram described as "foolish" the move by some developed nations to divert food crops for production of fuel.

"Food prices have been on the rise, thanks to the, sorry, foolish diversion of food to fuel. We are directly affected by these price increases," he said.

Though intellectually there is no argument for banning futures trading in commodities, it is difficult to say whether it would be banned, Chidambaram said, expressing disappointment at the Abhijeet Sen panel that studied the impact of futures trading on food prices not reaching a conclusion on this issue.