Finance Minister P Chidambaram today said the Union Budget for 2008-09 would stimulate investment and consequently growth, while pointing out that he had done the best through the budgetary exercise by providing credit facilities to the farm sector.

"Credit is only one element of the story in the farm sector. I provided more credit. Budget can only address credit side... the farm sector has not done too bad this year," he said in his post-Budget comments.

The Finance Minister had announced debt waiver and relief worth Rs 60,000 crore to small and marginal farmers in the Budget, the last full financial statement before the general elections next year.

"This Budget will stimulate investment and growth and that growth will create wealth... the economy is growing by 8 per cent, people have become more tax compliant and they are willing to pay taxes," he said on the buoyancy in government's revenues.

The Finance Minister dismissed the criticism that his debt waiver package announced in the Budget would lead to high inflation.

"I don't think farm, debts waiver packages are inflationary. Spending, according to conventional economics, is inflationary... but if production increases, the capacity increases, it is not inflationary. Today there is slack capacity, investment is taking place, consumption is flagging. So, if you stimulate demand... there is enough capacity on the production side, it is not inflationary," he said.

Chidambaram further said the government will continue to pursue the path of growth and anti-inflation steps would be taken, if the situation warranted.

"If it is inflationary, we will take steps. We cannot give up the pursuit of growth.. because it is growth which gives you the revenues and the revenues which give you the opportunity to spend on education and health care."

Downplaying the impact of a possible recession in US, the world's largest economy, the Finance Minister said, "We are not so dependent on US economy like some other countries. Japan is likely to do well. China is our biggest trading partner. Europe, Germany are also doing well. Britain is doing well. Some countries of Europe are doing well."

"There are other Asian markets, African markets. Please remember that there are over a 100 countries that are enjoying GDP growth of 5 per cent and above... There are opportunities elsewhere in the world, even if the US goes into recession. I hope not, I wish not..."

"... our people are quite resilient to find other markets... If 100 countries are growing at 5 per cent and above, there are opportunities we should capitalise on," Chidambaram said.

On whether we need more initiatives to attract foreign funds, Chidambaram said "actually we do not need... that phase is over. The phase to sell India as an investment destination is over. The copious flows of FDI and FII... in fact the problem is management of flows."

India is the most attractive investment destination as far as domestic capital is concerned and said it was evident from domestic companies raising record amount of funds from the capital market in the two years since 2006-07.

"So, today there is no problem about selling India as an investment destination the problem is how you quickly actualize the investments realising...." he noted.

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