The finance minster has promised foreign institutional investors (FIIs) that he will stick to the 5.3% deficit for the current year. He aims to reduce the deficit by 60 basis points in each year for the next four years till it reaches 3%.
The finance minster has promised foreign institutional investors (FIIs) that he will stick to the 5.3% fiscal deficit target for the current year. He aims to reduce the deficit by 60 basis points in each year for the next four years till it reaches 3%. Also, he sees India getting to 8% GDP growth rate by FY14.
All these targets and promises are part of his road shows in global financial centres ahead of the divestments and the Union Budget, reports CNBC-TV18’s Latha Venkatesh.
This is the first leg of FM’s whirlwind tour to the key financial centers and the initial reports are very positive. The report from Citi for instance, which hosted the first conference begins by saying that the FM was extremely open, candid, sincere in his comments and was very open to all suggestions made by the investors.
The finance minster began the presentation by saying that politics in India – democratic politics itself is a positive and in that politics had turned a little more positive. He was probably referring to the previous time when Mamata Banerjee was on board and UPA-I when the Left was on board and when things were more ideological.
He seems to hint that politics has become more practical now, so it is getting a little easier to implement reforms. If the winter sessions of the parliament were longer then the government would have implemented more reforms. There was greater concentration on the macro economy. While the gross domestic product (GDP) growth would be in the 5.5 or 5.7 percent range in the current year, he promised to bring it between 6.5 and 7 percent in FY14 and 8 percent in FY15.
Importantly, he said that the government would stick to 5.3 percent fiscal deficit target in the current year, but now details on how this would be achieved were provided. Talking about the upcoming Budget, he reassured investors that he doesn’t intend to make it a populist or an election Budget.
He added that there will be no taxes because he wants certain sustainability and predictability in the tax regime. He would want more tax revenues through better implementation and simplicity of taxes rather than complicating the tax structure. Some promises were also made regarding goods and services tax (GST), formation of cabinet committee on infrastructure (CCI) and how infrastructure bottlenecks will be removed.
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