Steps to push reforms, investment soon: Chidambaram
New Delhi: In a bid to accelerate the process of economic reforms and spur investment, government will soon decide on coal and gas pricing and review FDI cap in various sectors including defence, Finance Minister P Chidambaram said on Thursday.
A day after rating agency Fitch revised credit outlook for India from negative to stable, he addressed a press conference to say that government will also give a push to 30-40 of the 250 private sector projects that can quickly take off the ground in yet another attempt to boost growth.
With rupee taking a knock on account of high current account deficit, Chidambaram said while he shared the concern, there was no need to panic. He hoped authorities will take measures to ensure that there is no volatility.
However, he ruled out any further increase in duty on gold imports while parrying questions on issuing NRI bonds to attract foreign investment.
The Minister also said that banks should pass on rate cut implemented by the Reserve Bank to the tune of 1.30 percent for which he will be meeting chairmen of public sector banks. Banks have passed rate cut to the tune of 0.3 percent only.
"I could not agree with Fitch more. There are a number of decisions which I expect to be taken in the next few days and few weeks. I would think the following issues will be resolved before the end of June.
"Firstly on coal pricing and coal allocation to power plants. Secondly gas pricing. Thirdly on FDI limit and fourthly on a number of steps that Sebi is contemplating based on Chandrasekhar Committee report which was submitted yesterday," he said.
Chidambaram welcomed the recommendations of the Chandrasekhar committee and said Sebi board will take a view on it on June 25.
"We think the Chandrasekhar committee report is extremely positive and they deserved to be accepted, of course, after discussion," he said.
In its report, the committee has asked for simplifying the rules for foreign institutional investors entering the stock markets.
Recalling the statement he made after taking over as Finance Minister in August last year, Chidambaram said he had then suggested that a number of measures had to be taken to revive growth in the economy.
"Top of the list was fiscal consolidation. The second was moderating inflation. The third was reviving investment," he said, adding there was now acknowledgement that steps taken have delivered the outcomes in each of these heads.
He specifically referred to fiscal consolidation and moderation of inflation in this regard.
On the falling rupee, he said, what was happening is not unusual to India. Countries with large CADs including South Africa, Brazil and Mexico have taken hits on their currencies.
"But that does not mean, rupee will continue to depreciate. Rupee will find its level. We are concerned about the volatility. I think steps are being taken to ensure that there is no volatility.
"The rupee will find its level and it is quite possible that it will regain some of the losses suffered in the last few days. I don't think we need to panic about what is happening in the rupee. It does put pressure on inflation, subsidy bill, especially on imported commodities." he said.
On FDI liberalisation, Chidambaram said things were in the last lap. The report of the Committee headed by DEA secretary Arvind Mayaram will be available on Monday or Tuesday.
After that he and Commerce Minister Anand Sharma would meet and take the issue to Prime Minister.
"We are looking at every sector. The principle is very simple. Does the FDI cap serve any purpose today? If it does, we will keep that gap. If not, the cap should be either relaxed or removed. That is the mandate of the committee and it is in the final stages. We are looking at all sectors including defence."
Chidambaram said that government will not compress expenditure this year and whatever has been provided to ministries will be made available to them. They are being encouraged to accelerate spending.
He said in the first month of April both Plan and Non-Plan expenditure have been according to the target.
"Public spending, government spending will help the growth process. I will not compress expenditure. I will also achieve my revenue target. Revenue collection are broadly satisfactory both in direct and indirect taxes," he said.
The Minister also said the fiscal deficit target of 4.8 percent for 2013-14, which appeared too ambitious, was imminently achievable.
On gold, he said, imports have sharply come down but he would be happy if the imports come down further.
The Minister expressed satisfaction over the fact that the net gold imports have come down from 135 million dollars a day in the first 13 business days of May to 36 million dollars in subsequent 14 days.
Asked if why government should not increase duties on gold to check imports, Chidambaram said "I don't want to become too unpopular. We will see."
He said anyway people who are financially well informed should put their savings in financial instruments and other savings instruments rather than in gold.