Saturday, September 24 2005 09:07 Hrs (IST) - World Time -

Washington: The emergence of India and China along with Brazil and South Africa, on the path of reform, progress and prosperity is good for the world, Union Finance Minister P Chidambaram has said.

Chidambaram, who appeared in a TV interview on the Charlie Rose show, said that because of China and India's population, their impact will be greater.

Asked how the economic 'miracle' happened, the Minister replied it was a combination of many factors.

"The most important one was that India faced a balance of payments crisis and, therefore, she had no option but to take some steps to ward off that crisis. Secondly, the right people were in the right place," he said.

India's average growth, Chidambaram pointed out, has been about 6.5 per cent.

"We grew at 7.5 per cent for three years in the mid-90s, and since 2003 we again seem to be averaging 7 per cent growth," he said.

Speaking on the future rate of growth, Chidambaram said a growth rate of seven per cent would be the 'bare minimum'.

"We must deliver 7 per cent year after year, and we must aim at 8 per cent," said Chidambaram.

"If all goes well, we think we can maintain a 7 per cent growth over the next 10 to 15 years," he said, adding India would then be competing for the third or fourth place as the largest economy in the world.

However, he pointed out that both India and China would not rise to the level of the US in per-capita income even if the size of their economies rise because of the large population.

He said both the countries had to look at the distributive side also.

Asked to compare between India and China, Chidambaram said the physical infrastructure of India was not as good as that of China's but India's financial infrastructure banking and insurance were as good or better than China's.

He added that financial regulations were also much better in India.

Speaking of his worries, Chidambaram said, "I can tell you what I worry about but not because we don't have the answers. We think we have the answers. What we need to do is continue to grow India at a rate of 7 or 8 per cent a year, appropriate a large portion of the surpluses to deal with poverty issues, so that even as we grow as an economy, per capita income will rise."

The Minister said the country needed to address 'issues of education, health care, drinking water, sanitation, roads in our villages, to take care of the minimum needs of our poor people.'

He said this could be done "Provided we grow at 7 to 8 per cent and appropriate resources to deal with these issues."

Chidambaram also spoke on the country's need for infrastructure, saying energy would play a very critical role.

India needs to vastly add to its generating capacity for power 10,000 megawatts of additional generating capacity every year for the next 10 to 15 years.

"That is the kind of infrastructure requirements India has," said Chidambram, adding similar 'mind-boggling' figures were there for roads, railways, and telecom.

"Therefore, in the next 10 to 15 years, all the investment opportunities, especially in infrastructure, are to be found in China and India, and maybe one or two other countries," he said.