JOIN USWill leave treasury more stable, says Chidambaram
Amid mounting criticism that increased public spending ahead of elections may cause enormous damage to the government, Finance Minister P Chidambaram has assured that he will leave a stable economy when he lays down office.
“I think the steps that I have taken in the last 18 months have stabilized India's economy... when I lay down office I am absolutely confident that we will leave a more stable economy than what it was about two years ago,” Chidambaram said, addressing a business conclave here.
The minister also termed the recent cut in prices of Compressed Natural Gas and Piped Natural Gas as rationalisation of some prices.
“...just because you guys call it a sop it doesn't become a sop. Government has rationalised some prices, that's a decision taken by oil marketing companies,” he said.
Analysts and even the Reserve Bank of India have expressed concerns about widening fuel subsidies after the government raised the number of LPG cylinders consumed by the household in a year to 12 from nine.
The RBI governor had called it a misdirected subsidy in an interview to a private TV channel this week. Prior to this, the RBI in its quarterly report, had said that the government needs to strive for a balance between fiscal consolidation and economic growth by focusing on quality of government spending.
Certain brokerages have raised concerns about whether the government will be able to hold the fiscal deficit below the targeted 4.8 per cent this fiscal (2013-14).
Chidambaram, however, said he had no doubt that the fiscal deficit will be contained at 4.8 per cent or below. Government’s fiscal deficit in the first three quarters (April-December) has inched closer to the budgeted target for the entire year.
The minister also hit out at the recent controversy surrounding definition of poverty line, saying that irrespective of where the poverty line is drawn now, poverty has reduced in India over the last 10-12 years, but the country has performed worse than China.
“You draw the line at this number proposed by the
Planning Commission, or the number proposed by Dr Tendulkar, or wherever you draw the line, nobody can deny that between the first line that was drawn say 10-12 years ago, and the second line drawn today, wherever the line is drawn, the fact that 140 million people have been lifted out of poverty is undeniable,” Chidambaram said.