The Hindu Business Line : 'Govt hopeful of 4.5 pc inflation rate by year-end'

THE Finance Minister, Mr Jaswant Singh, today said the country could achieve its target in containing the inflation rate at 4.5 per cent by the year-end. The current rate of inflation is 5.6 per cent.

Dispelling doubts about the Government's ability to achieve the target, Mr Singh told presspersons here that, "We have discussed the target with the Reserve Bank of India. We are confident that the target will be reached by the year-end."

Mr Singh was here as part of the BJP's election campaign in Karnataka.

Referring to the current round of public sector dilutions, he expressed satisfaction at the response. He, however, added that these dilutions would not have any impact on fiscal deficit estimates for the current financial year. The revised fiscal deficit estimates for the year are pegged at 4.8 per cent. Receipts from equity dilutions in the equity offerings from PSUs have already been taken into account. But he added, "If as Finance Minister I get, I will not refuse."

The PSUs, whose dilutions are under way, include CMC, GAIL (India) Ltd, Power Trading Corporation and ONGC. The revised estimates for the current fiscal have pegged the disinvestment receipts at Rs 14,500 crore.

Asked whether the Government would go in for another round of loan prepayment to multilateral institution given the burgeoning foreign exchange reserves, Mr Singh declined to make any comments.

Instead he said, "I am bound by the Election Commission's code of conduct." So far the Government has carried out two rounds of debt repayments to external financing agencies - the World Bank and the Asian Development Bank, equivalent to about $4.3 billion.

Mr Singh refuted the Opposition's allegations that the high GDP growth rate during the third quarter of this year, was due to the bountiful monsoons.

He pointed out that the Government has analysed the disaggregated growth of all sectors pointing to their upward growth curve resulting in the GDP growth of 8.9 per cent.

The Government is confident that this momentum would be sustained in the coming months also.

The industry is doing well, but the Government is particularly satisfied with the turnaround in the steel sector.

The country has become a net steel exporter despite the volatile international prices. Besides, he said the Government is taking steps to counter the shortfall in metallurgical coke supplies from China.

Metcoke is used for blast furnaces in steel making. China is among the largest suppliers of Metcoke to the domestic steel industry.