After announcing a slew of reform measures to revive growth, Finance Minister P. Chidambaram has indicated that the Budget for 2013-14 would focus on cutting wasteful expenses and promoting investments.
“We must have a budget that emphasises fiscal consolidation and incentivises savings, promotes investment and cuts out wasteful expenditure,” he told Bloomberg Television here yesterday.
However, he added that the Government’s key social welfare programmes will be fully protected.
Chidambaram and Reserve Bank of India Governor D. Subbarao are here for the IMF-World Bank meeting.
In the face of rising food, fertiliser and fuel subsidies, containing high fiscal deficit is a key challenge for the Government.
Fiscal deficit target
Though the fiscal deficit target for 2012-13 has been pegged at 5.1 per cent of the GDP, economists feel that it may be difficult for the Government to stick to the Budget estimates.
On the warnings by global agencies about the possibility of the country’s rating being downgraded, Chidambaram said, he was “absolutely certain” that India’s credit rating won’t be downgraded.
Ratings downgrade
Earlier this week, Standard and Poor’s (S&P) had warned that India’s sovereign credit rating may be cut to junk grade within two years if steps are not taken to check fiscal deficit and improve investment climate.
In the backdrop of a slowdown and demand for cut in interest rates, the Finance Minister said: “Rates must come down and if the fiscal policy steps that we are taking encourage the central bank to take monetary policy action which will result in lower interest rates, I think that will be good.’’
The RBI is scheduled to unveil its second quarter review of the credit policy on October 30 amid expectations of cut in the benchmark interest rate.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.