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Mar 05, 2013, 03.39 PM IST | Source: CNBC-TV18

Budget-making not one-stop exercise: FM to India Inc

Finance Minister P Chidambaram on Monday had a post Budget meeting with representatives of industry associations.

Moneycontrol Bureau

Finance Minister P Chidambaram on Monday had a post Budget meeting with representatives of industry associations.

"Budget-making is not a one stop exercise, but it is a continuous process. The objective of the Budget was to signal investors of India being on path of fiscal consolidation," he told industrialists and the media present at the meet.

Also read: India Inc gives thumbs up; says Budget progressive

Given the fact that this was UPA II's last Budget before general elections of 2014, it was expected to be investor friendly Budget. However, no big bang measures were announced, which disappointed many.

The finance minister reiterated that India's ballooning current account deficit (CAD) is more worrying than fiscal deficit. According to Economic Survey 2012-13, which was released a day before Union Budget 2013, FY14 CAD is likely to come in at 4.6 percent.

The fiscal deficit for the current financial year has been estimated at 5.2 percent of the Gross Domestic Product (GDP), lower than the estimated fiscal deficit target of 5.3 percent.

However, Chidambaram expects the final fiscal deficit number to be below 5.2 percent.

Market experts were hoping that Budget 2013 would focus on wooing foreign investors and attract more FII funds. However, the confusion around the tax residency certificate (TRC) kept markets on tenterhooks for a while.

A clarification was issued by the finance ministry saying that there was nothing new that is being proposed and the taxman will not hound FIIs over TRCs,

Also, Chidambaram reassured that Sebi chairman UK Sinha will meet FIIs shortly to address their concerns. "I intend to travel to Japan, Canada and the US in April-May to address concerns of foreign investors," he said.

Earlier, Chidambaram had made his stance clear on the Mauritius route . He said misuse of the tax treaty needs to be curbed, for which the government intends to revise the Double Taxation Avoidance Agreements (DTAA).

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