Roadmap for fiscal consolidation soon: Chidambaram

India would be lucky if it manages to hold country's fiscal deficit at 5.1% of the gross domestic product (GDP), finance minister P Chidambaram said on Monday.

The government last week raised diesel prices in a move aimed at reining-in the widening fiscal deficit and reviving investor sentiment. However, several economists do not agree with the government’s fiscal deficit projection of 5.1% and predict that it could reach 6% or more.
Finance minister P Chidambaram addressed and interacted with media-persons on Monday evening, including CNBC-TV18's Shereen Bhan, regarding the government's plan to formulate a roadmap for fiscal consolidation.
"In the last few days, the government has taken a number of decisions and wishes to inform the public the background and the processes that led to the taking of these decisions. Against the backdrop of the RBI's mid-quarter review of the monetary policy, the government wishes to explain its decisions and plans to the people at large," he explained. Below is an edited transcript of the interview on CNBC-TV18. Q: What can we expect in terms of measures from the government because the Reserve Bank is a lot more dovish then it was in previous policies?
A: A number of issues will be addressed in the next few days-issues with Sebi, the department of revenue and the department of disinvestment. The Planning Commission meeting on Saturday threw up some ideas which will be fleshed out.
So I am hoping that some major decisions will be taken at the Cabinet and CCEA meetings this week and next Thursday. Most of them have been indicated in my statement on August 6 and that will give you a fair picture of the decisions that could be announced over the next two weeks or so.
Q: What is your realistic estimate as far as the fiscal deficit is concerned? We know that the Kelkar Report has submitted its recommendations and the report has not been made public. We know the decision on hiking prices of diesel is not going to really make a big dent as far as oil subsidies are concerned and there is already a clamour for a rollback in LPG and you plan to increase the number if cylinders from six-to-ten. Given these factors, what is the most realistic estimate in terms of fiscal deficit?
A: There is an estimate by the Planning Commission, the government and by Dr Kelkar Committee. The Kelkar Report will be uploaded on the Web by the end of the week.
But before I put it out in the public domain, I must make a prefatory statement on the path of fiscal consolidation that is being mapped. We will be lucky if we can hold the deficit at 5.1%. There will be some slippage and the percentage will depend upon some decisions that we will take over the next few days. Q: Are you factoring-in the revenue from the auction of spectrum?
A: The revenue from spectrum is already factored in. Q: Are you factoring-in a higher number as far as spectrum is concerned?
A: I don't know. Q: But will that be adequate?
A: I don't think so. I think it's too early. The auction process itself goes up to end of December or early January. My expectation is that we should get a good price and that has already been factored in. So we must look for other sources of revenue over and above of what has been factored-in. Q: What could your other sources of revenue be?
A: We will examine the options as we go along, but we are certain of maximising revenue and we plan to curtail some expenditure.
Q: How concerned are you about the threat of sovereign downgrade?
A: I don't share the description of the downgrade looming large. Q: But what about the threat of a downgrade over the next 18 months?
A: Eighteen months is a long time. We are not talking about 18 months. We are talking about something looming large, something immediate. I don't think it is imminent at all.
_PAGEBREAK_ Q: Till the NIB actually comes into effect, what can you do to fast-track at least some of these projects? Is there a plan to put some of these projects on a fast-track basis because there are 89 as you pointed out?
A: We are doing that. They will send me their report by the end of the month and I will submit the report to the PM. And by the time the report reaches me by September 30 and I give my report to the PM in the first week of October, I think some of these 89 projects would have moved forward. Q: So some of these projects have been identified as projects that the government wants to fast-track?
A: No, we want to fast-track all 89. Q: Can you be realistic?
A: Some of them will get automatically fast-tracked because of the deadlines set on September 30 and the first week of October. Q: I just want to get your comments in on disinvestment. You said that the government would divest take in all four PSUs which received approval by the Cabinet within the next six months. There are PSUs  like SAIL whose divestment already has Cabinet approval but which still haven't been able to get to the market because the company and the nodal ministry weren't interested.
A: No, what has already been approved must be added to the four. Q: So is SAIL likely to be divested?
A: That I cannot say. That is for the empowered group to take a decision. But they are all on the table and I would like all the cases approved for the disinvestment go forward in the next six months. Q: You were talking about augmenting revenues. Since EGoMs have not worked in the residual stake-sale of Hindustan Zinc and BALCO and the companies have written back to the government asking for a more transparent methodology for a fair market valuation of the residual stake. This has been pending for a very long time. Is this likely to be taken up by the Cabinet anytime soon?
A: We know that for over the last eight years as these two cases have been recused, but I am told that it on top of the agenda of the IMG chaired by the Cabinet secretary. Q: You said that because of external risks, QE3 and the rising tensions in the Middle East, crude oil prices will surge significantly. Does this present a window of opportunity for the government to hike diesel prices again?
A: I can't speak about the decisions which have not been taken. We can only talk about decisions which have been taken. Q: But do you think there is political appetite to take that kind of risk?
A: That's again a political risk. Q: What could be the way forward on the Shome Committee's recommendations on retrospective amendments related to Vodafone-like transactions, because the government's opinion was that arbitration was a long- drawn process and nobody really wants to go down the arbitration route. If this continues to be law, how do you actually resolve this issue?
A: We are in the government in order to resolve these issues. Q: What could be the other way out?
A: There are a lot of ways out. Let us wait for the Shome Committee's report which will suggest alternatives.