Chidambaram held a review of the economy's performance to coincide with the one-year anniversary of the Congress Party-led coalition government on May 22, and said the biggest achievement was to bring inflation down from levels above 8 percent to around 5 percent now.

However, the Chidambaram said in order to meet central bank estimates of seven percent growth for the fiscal year started April 1, the monsoon, which normally arrives off the southwest coast of the country on June 1, needed to bring plenty of rain for the farm-dependent economy.

"We have managed to contain inflation at moderate levels, interest rates are benign and the gross domestic product is expected to grow by about seven percent this fiscal," he told a news conference.

This would however "depend on good monsoon (rains) and action on the part of the government," he said.

India's weather office has forecast the monsoon, which covers India from June to September, would be healthy this year following several years of sporadic drought.

With a good monsoon, Chidambaram said farming, which accounts for a quarter of the country's gross domestic product and employs about 60 percent of the population, is expected to grow by three percent while manufacturing and services would also continue to do well.

But commentators note the communist parties that give crucial support to the government have opposed many economic reform polices such as state asset sales and more foreign investment.

"As far as economic policies are concerned, the left (communists) has been helpful and alert. Their point of view keeps us alert and help us formulate the right mix of policies acceptable to parliament," he said.