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"The economy is growing at an average rate of 8.6 per cent and the rupee is bound to strengthen,'' Chidambaram told captains of industry at an interactive session organised by the Mumbai Congress Committee.
"Indian companies must learn to adjust to trade in an environment where the rupee would appreciate. The concern is about the rapid appreciation. Had it (pace of rupee rise) been slow, industry and commerce would have got time cope up with changes," he said.
The government will support the trade in facing the situation. But they should also keep in mind that India has enjoyed subsidised exchange rate regime for many years before they had to face surge in the value of rupee, he said.
Opining that rupee appreciation will be with us for long, he said "merely because profits are down, I don't think we should present an alarmist picture.''
The rupee has strengthened by over 10 per cent against the US dollar since end-March 2007. The government is alive to problems of exporters and has already announced three packages worth Rs 5,200 crore to partly mitigate the impact of the rising rupee, the finance minister said.
"Thanks to global turmoil (economic slowdown in certain regions), India's economic growth in 2007-08 will be close to 9 per cent compared to 9.4 per cent in 2006-07," he said.
Industry needs to innovate and cut the cost to remain competitive and should not resort to cutting jobs, said Chidambaram.
Turning to the growth potential of the Indian economy, Chidambaram said assuming nine per cent per annum growth in the economy over the next 18 years, the per capita income will rise four fold to $ 4,000 by 2025.
He expressed dissatisfaction over the working of public private partnerships in areas like infrastructure. The private sector can come up with projects and specify areas where it will need public sector's support, Chidambaram added.
