Finance Minister P Chidambaram says while he is confident about continued growth of the Indian economy in 2009, what might dampen the growth story in the next three or four years are external factors like the rise in prices of crude oil and commodities.

Addressing US investors, financial analysts and company executives via live videoconference after the presentation of the fiscal Budget in India, Chidambaram said his immediate concern about the economy is about next year when the term of the government comes to an end.

"I am reasonably confident that next year too we will have growth. In fact, it is with that goal in mind that we have given a stimulus to the economy this year," he said in response to a question.

"In the first four years of my term growth (in GDP) has been 8.8 per cent. I will be happy if I can complete this term with a batting average of 8.8 percent. But looking beyond, it will all depend on what happens to the external economy," he said.

"I would only fervently hope that these (external) prices would cool down and won't put pressure on Indian prices and affect our growth story. Otherwise, Indian growth story seems intact in the next several years," Chidambaram said.

In defense of his Budget, Chidambaram said its aim was to keep the "growth story intact, but to make it more inclusive at the same time." That is why, Chidambaram said, he is focused on sectors like agriculture, health and education and addressed the special needs of the disadvantaged sections and poor farmers.

Most of the 80-odd members of the audience that interacted with Chidambaram gave the finance minister a high rating for the Budget in view of the fact that Chidambaram had to strike a balance between populism and pragmatism.

Among those who were present at the event included Professor Arvind Panagariya of Columbia University, Uday Ved, COO, KPMG, P. Gopa Kumar, President & CEO, ICICI [Get Quote] Securities Inc and Sunil Wadhwani, CEO, iGate Corporation. They later sat on a panel to discuss the Budget.

"There were fears that it would be a populist Budget, but I must say that it is pleasing to many of us here (to see) that populism and reform need not to be in contradiction and that they can go together,' Panagariya, an expert on Indian Economy, said.

Wadhwani, similarly, complimented the minister on the Budget. "It is heartening to see 20 percent increase in expenditure in education and 15 percent increase in healthcare, among others," he said, adding that he was a bit concerned though about the future given the inflationary pressures on the economy.

"The FM gets an A (rating) for this Budget," the majority of the audience indicated as Consul General Neelam Deo asked them to rate the Budget by raising their hands.

In response to a question as to what he could not do in the Budget that he would have done if he had his way, Chidambaram said that he knew that in a coalition government "no minister has his way."

"Obviously, given the overall situation, there are external factors, internal compulsions and taking into account all these factors, I am happy that we have been able to do so much. Thanks to tax revenue buoyancy, I am quite happy with what we have been able to do,' he said.

"We could not have done (what we have done this year) in the first year of our Government. We had not that kind of money. But thanks to the growth rate we have today, we have the freedom to do a number of things in various fields, that ought to be done, in health education, roads, drinking water and rural housing. I am pleased we have been able to give immense relief to small and marginal farmers,' he said.

Although, the Budget was generally welcomed, there were a few question as well from the members of the audience. For example, Panagariya, despite supporting the Chidambaram's proposals overall, expressed disappointment over the tariff rates.

He noted that the top tariff rate on industrial products has been cut every year during the last eight or nine years and is currently 10 percent. "The FM has long (since at least 1997-98) promised to bring India's tariffs down to the levels in countries in Southeast Asia or the ASEAN (Association of Southeast Asian Nations) levels. But this year he chose not to cut it because (according to him) the rupee has appreciated substantially, which has already made imports cheaper. My concern was whether there is a signal in non-action this year that we are done with this liberalisation,' Panagariya told rediff.com.

"I was glad to hear the FM reply that he remained committed to bringing the tariffs to the ASEAN levels and that non-action this year was a 'pause' rather than 'a stop.'"

In response to another question on the rupee's appreciation vis-�-vis US dollar and its impact on the Indian economy, Chidambaram said that India is not as dependent on the United States as some countries are.

"The US is an important trading partner, but we are not totally dependent on its economy. If our exports are affected to some extent, it will, (and) that is why I have given a stimulus to demand, hoping that the loss of export demand will be to some extent compensated by rising domestic demand," Chidambaram said.

"The interest rate differential between US and India has it own consequences. It is quite possible that more money would move into India, and if that happens we would have to take some more measures to moderate the flows into India," the finance minister said in response to the question.

"But I would certainly hope and pray that the US does not go into recession. But if it does, we have to be on guard. We have to make some strict adjustments in policies."

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