The Hindu Business Line : `Political space needed for financial reforms'

More reforms
Growth rate can't be sustained without reforms
Ministries must remain within budgeted expenditure
`No difference of opinion with RBI on interest and inflation'

Making a point: The Union Finance Minister, Mr P. Chidambaram, addressing a press conference in the Capital on Friday. -- Ramesh Sharma

New Delhi , Sept 29

The Finance Minister, Mr P. Chidambaram, on Friday stressed the need for political space to push through some of the reforms, especially in the financial sector.

Speaking to newspersons after the release of growth figures for the first quarter of the current fiscal, he said that it would be difficult to sustain the current high economic growth rate unless the financial sector reforms are completed.

"The financial sector is the heart of the economy. We must find the political space to undertake further reforms. This is very important for a coalition Government," he said.

"It is important from the country's point of view that we pass the legislation that are pending on banking and pension reforms and the proposed Bill on insurance reforms."

The Finance Minister expressed confidence that given the buoyancy in tax revenues this year, the fiscal deficit and the revenue deficit targets for the current fiscal would be met.

"At the moment, there is no reason for concern that we will not meet the targets."

He added that Ministries have also been requested to remain within the budgeted figures as far as expenditure is concerned.

Fiscal deficit of the Centre in April-August this year stood at Rs 90,678 crore (60.98 per cent of the Budget estimate of Rs 1,48,686 crore).

While the Centre's tax revenues grew by 39 per cent to Rs 81,444 crore during the period, non-tax revenues grew by 15 per cent to Rs 25,107 crore.

The Minister also said that the Centre has devolved Rs 11,737 crore more this year upon the States than last year.

Mr Chidambaram maintained that he had no difference of opinion with the RBI on interest and inflation. He added that the country's stock price movements have been orderly in the last three months.

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