Will limit twin deficits; 6% growth achievable: Chidambaram

The fiscal deficit (FD) will be limited to 4.8 percent in FY14 and the present rate of inflows will add at least USD 80 billion to the exchequer and to that extent the government will be able to reduce the current account deficit (CAD), said finance minister P Chidambaram in an address to mediapersons to mark the end of one-year at the helm of the Ministry of Finance.

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On whether the measures taken to strengthen the rupee would add to the subsidy bill, finance minister pointed out that there were a number of factors that would decide the subsidy bill other than currency movement. Chidambaram also dismissed that queries that sought to clarify if the problems affecting the economy were restricted India alone.
"Economies across the globe are challenged. The fall in the rupee during June-July was not expected. The government, in consultation with the RBI, has taken measures to contain inflation, reduce volatility and stabilise the rupee," he emphasised.
Regarding the achievement of growth targets, Chidambaram was quite confident that the economy would grow at levels announced in the Budget. "If a 19-percent growth in revenues led to GDP growth of close to 5 percent, surely a 21-percent boost in revenues would allow for a GDP growth of 6 percent?," the finance minister retorted. "The CBDT and related departments have assured the government that the revenue targets would be achieved."
In a move to settle the debate on the government's plan to issue sovereign bonds, Chidambaram said that the initiative remained one among many options to boost the inflow of investment into the country. He also added that public sector companies, "most of whom have strong balance-sheets" will be asked to raise funds overseas via quasi-sovereign bonds.
"The government is also planning to further reduce duties on non-oil and non-gold imports." Chidambaram highlighted that the government has announced a Rs 2,000 crore incentive package to boost exports —Rs 1550 crore will be used to set off last year’s balance of payments, Rs 1,200 crore will be spent to pay off arrears and Rs 450 crore will be used on schemes to boost exports. The finance minister also added that the increase in interest subvention from 2 percent to 3 percent on certain sectors would be effective from Thursday.
"The government’s target is to keep gold imports for FY14 well below 845 metric tonne and banks should provide agriculture loans in excess of Rs 7 lakh crore as the rainfall to date now has been 18 percent more than long-term average."