Expects to rein in fiscal deficit

Putting up a brave front, the Government on Friday said it still hoped to get substantial ‘net gain’ from 2G spectrum auction. Finance Minister P. Chidambaram said he was confident of keeping the fiscal deficit within the revised target of 5.3 per cent.

Addressing a press conference, Chidambaram said: “There will be a substantial net gain (to the Government from 2G auction)… the auction process is not complete. There are still some GSM circles, CDMA circles and re-farming (of spectrum), which have to be completed.”

Telecom Minister Kapil Sibal, who was also present, said the Government would get Rs 17,343 crore, which includes Rs 9,407 crore from spectrum sale in the 18 circles, and Rs 7,936 crore from one-time spectrum charge for these circles. This is much lower than the budgeted Rs 40,000 crore.

Fiscal deficit

The money from spectrum auction was seen as key in checking the ballooning fiscal deficit.

After the poor show in the auction this week, along with the no-show on the disinvestment front, analysts apprehend that actual fiscal deficit will be much higher than the revised target of 5.3 per cent. But the Finance Minister did not seem too worried.

Chidambaram said: “I am still confident of achieving the 5.3 per cent target. I don’t think we should spread pessimism or cynicism, there is still time. The disinvestment process will start and the spectrum process will also continue.”

The Government is looking to mobilise Rs 30,000 crore from offloading part of its stake in various public sector undertakings (PSUs).

Although there are approvals for disinvestment in nine PSUs, the Government is yet to complete the process in even one of these.

The initial public offer (IPO) of Rashtriya Ispat Nigam Ltd has been deferred twice, while the offer for sale through stock exchanges in Nalco was postponed citing poor valuations.

Positive on growth

Talking about the economy, Chidambaram said the Government would be taking steps to revive growth, which slipped to a nine-year low of 6.5 per cent in 2011-12.

“We are taking a number of steps to revive economic growth. Only this morning you must have read that the Euro Zone is formally in recession. We are nowhere near that situation,” he added.

The Indian economy is still growing at 5.5 per cent, he said, adding that the “second quarter numbers will be known by this month-end. And I think there will be a pick-up in the third and fourth quarters.” The growth rate in the first quarter of 2012-13 was 5.5 per cent.

Balanced Budget

The goal, he said, would be to tide over the difficult period and end the year on a reasonably satisfactory note.

He said he would endeavour to present a “more balanced Budget” for 2013-14 and expressed confidence that “growth will revive and (we will) move on to a high-growth track.”

shishir.sinha@thehindu.co.in

(This article was published on November 16, 2012)
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