Chidambaram Unveils Five-year Fiscal Consolidation Plans


New Delhi, Oct 29 (IANS): Finance Minister P. Chidambaram Monday spelled out a five-year plan to cut India's fiscal deficit from an expected 5.3 percent in the current fiscal to three percent by 2017.

?As fiscal consolidation takes place and investors? confidence increases, it is expected that the economy will return to the path of high investment, higher growth, lower inflation and long-term sustainability,? Chidambaram said.

The GDP (gross domestic product) growth last fiscal declined to a nine-year low at 6.5 percent, as double digit-inflation added to the woes of a slowing economy.

Chidambaram's plan for a reduction in fiscal deficit comes a day after a major cabinet reshuffle meant to boost the government's performance, and a day before the central bank's half-year quarterly policy review.

According to Chidambaram, the government has accepted the Kelkar Committee's recommendations aimed at containing fiscal deficit, and he expected the same to be at 5.3 percent of GDP in 2012-13.

The process to contain the deficit will include the usage of unique identity number - Aadhaar - to distribute subsidies to the below poverty line population, thereby plugging leakages.

Chidambaram also expressed hope that the Reserve Bank of India takes cognisance of efforts meant to contain deficit and cuts key lending rates to spur growth.

However, the central bank is not expected to cut rates, as high levels of food inflation will restrict its options.

Overall food inflation last month stood at 7.86 percent against 9.62 percent in the corresponding period of last year. Inflation of primary articles was 8.77 percent.

The finance minister added that he was reviewing the Direct Taxes Code (DTC), which is expected to be brought before parliament.

Chidambaram also expressed confidence that the government will be able to meet its current disinvestment targets and raise about Rs.30,000 crore.

  

Top Stories


Leave a Comment

Title: Chidambaram Unveils Five-year Fiscal Consolidation Plans



You have 2000 characters left.

Disclaimer:

Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Daijiworld.com will not be responsible for any defamatory message posted under this article.

Please note that sending false messages to insult, defame, intimidate, mislead or deceive people or to intentionally cause public disorder is punishable under law. It is obligatory on Daijiworld to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using daijiworld will be purely at your own risk, and in no way will Daijiworld.com be held responsible.