Chidambaram promises to bring economy back on track

Finance Minister P Chidambaram on Monday detailed a roadmap to boost India’s sagging economy, ease pressure on prices and promised to shortly unveil a path of fiscal consolidation, indicating tighter spending norms for the government in the days to come.

His comments on fiscal consolidation as also on undertaking review of retrospective tax provisions comforted market sentiments as the BSE Sensex rose over 1 per cent to its highest close since July 11. The rupee too rose to near a one-week high on Monday to close at 55.52 to a dollar.

Chidambaram said he will work with RBI to ensure that inflation moderates in the medium term. To this end, he also promised to remove the supply side constraints impacting food prices in the country and enhance import of essential commodities.

Chidambaram also pointed towards controlling fiscal deficit which has been bloated owing to large fuel subsidies and social sector spending. To this end, he said he has   formed a three-member panel to assist the government in formulating the path of fiscal consolidation.