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Aug 07, 2012, 09.57 AM IST
Newly-appointed Finance Minister P Chidambaram has chalked a definite plan to beat inflation, boost economy and attract foreign investment to the Indian shores.
Chidambaram said that the government is expecting to raise investment level to 38.5% of gross domestic product (GDP).
On a confident note, the FM assured that Indian economy is stronger today to face challenges and will soon return to path of high growth. However, he also warned that there is a drought-like situation in many states. "We are seeking support of political parties on pending bills. A cabinet panel will look at each infra project," Chidambaram said.
Adding that the government will unveil path of fiscal consolidation, Chidambaram said that it will work with RBI to ensure that inflation is moderated in medium term. The government will also set up panel on fiscal consolidation. Though price stability is an important objective, food inflation is still high and the government will take steps to remove supply-side constraints.
Saying that fiscal, monetary policies must move in tandem, Chidambaram is confident inflation can be tamed in medium-term. He also implored that states should share fiscal burden. He stressed that assessment should be made on spending and revenue.
He also assured that the government will modify policies to regain investor confidence. The FM said that the government must remove investors' apprehensions by attracting investment key to start growth engine. Meanwhile, PSUs will be encouraged to investment. The government will also have non-adversarial tax policies and fine tune policies to attract capital. There will be steps to push investment in MFs and insurance, FM promised.
Reviewing tax norms
Finance Minister said that the government will review norms with retrospective effect. The review will find solutions to pending tax disputes, he added.
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