Polls not a hitch for reforms: Chidambaram
Quotes

Polls not a hitch for reforms: Chidambaram

Last Updated: Wednesday, April 17, 2013, 19:36
 
 Comment 0
 
Polls not a hitch for reforms: Chidambaram
Boston: Vowing to deliver on the fiscal roadmap, Finance Minister P Chidambaram has expressed confidence that elections are not a hitch in carrying out reforms including fuel price adjustments.

Addressing an investor meet hosted by Citi Group here, he said while fiscal deficit will be reduced by 60 basis points each year, the current account deficit (CAD) will be narrowed by raising exports.

Citi said in a note after the meet, attended by about 100 investors, that the Finance Minister laid out the agenda for next few months--"regulator for road/coal (sector), resolution of coal supply issues (in next few weeks) and likelihood of another round of power tariff hikes.

"There's longer list, but more importantly, there's commitment on delivery, and confidence that upcoming elections are not a hitch," it said.

According to Citi, Chidambaram said the government was targeting 6.1-6.7 percent economic growth in this fiscal, which will rise to 7 percent in the next and 8 percent in 2015-16. "8 percent-plus growth is achievable given savings rate of 30-35 percent."

For the year, it is targeting a fiscal deficit lesser than the budgeted 4.8 percent, he said adding the government was aiming to bring down core inflation to less than 3.2 percent and WPI inflation to less than 6 percent.

On fuel pricing reforms, he said petrol prices have been freed while subsidy on LPG has been capped. "Diesel rates have been hiked 3 times already in steps of 50 paisa per litre. Elections should not derail the pricing reforms," Citi quoted him as saying.

The Finance Minister said 10 states have signed up for restructuring of their electricity boards and "tariffs have been revised up in all stats in the last few months."

The Citi note said Chidambaram stated that a regulator for the coal sector will be created soon and "issues of coal supply to power plants (will) be resolved over next few weeks, with all but 16 GW of suppliers to have assured coal supply."

Stating that a regulator for roads will be created soon, he said the government will offer about a dozen infrastructure debt fund are in pipeline.

The government will announce "a risk-based registration system (for FIIs). FIIs would be classified into three categories, with SWFs (sovereign wealth funds) and investors from FATF (Financial Action Task Force) countries afforded simpler KYC norms and fast-track approvals," he was quoted as saying.

Also, it is aiming to attract investment in SMEs, specially from countries like Germany.

"The Finance Minister more than delivered on his FY13 fiscal deficit target of 5.3 percent, despite significant odds and initial market skepticism. It doesn't stop here. Future targets are even more aggressive - 4.8 percent for FY14 and 60 basis points reduction per annum, and the focus on fiscal deficit remains high. The FY03-08 fiscal consolidation was accompanied by 400 percent-plus returns from equities," Citi said.

Citi said current account deficit remains the biggest which Chidambaram hopes to tackle with higher exports. Also, major headwinds in form of high inflation, high oil and gold prices are seeing significant swings to the positive.

"The government has been in high gear; reflected in economic and market pickup. The groundwork has been done; next blocks are in place. It's not going to be easy, but we think economy should get back on tract and market would likely follow," it added.

PTI


First Published: Wednesday, April 17, 2013, 19:36


Comments


comments powered by Disqus
G20 Summit 2014
G20 Summit 2014
2014`s Top People in Business: Fortune
2014`s Top People in Business: Fortune
World Bank`s Top 10 Places for Business
World Bank`s Top 10 Places for Business
India`s top ten billionaires
India`s top ten billionaires
Top 10 billionaire cities- In Pics
Top 10 billionaire cities- In Pics

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved