Indias economy, in terms of the size of its GDP, is the 11th largest in the world. There are great things in store, Chidambaram said while tabling the Interim Budget 2014-15 in Parliament on Monday. At the top of the finance ministers to-do list is to contain the twin deficits while fiscal deficit should be maintained at 3 per cent of the GDP by 2016-17, the current account deficit should also be controlled through foreign capital inflows. There is no room for any aversion to foreign investment, Chidambaram stressed.
The finance minister also passed on the baton on controlling inflation and boosting growth and cautioned the new government to push this through to the Reserve Bank of India. RBI must strike a balance between price stability and growth while formulating monetary policy, he said.
He also took up the pending agenda of implementation of the report of the Financial Sector Legislative Reforms Committee, building infrastructure and boosting manufacturing growth that is estimated to shrink by 0.2 per cent this fiscal. My intention was not to please anyone but speak plainly to the people that these are turbulent years ... and we have managed some stability. The Budget sense out a clear signal of hope to the people of India that things would be better, Chidambaram later told reporters, adding that if these 10 tasks are done, India could be the third largest economy in the world, only behind the USA and China.
Significantly, while highlighting the UPAs achievements in its 10 years at the Centre to refute any policy paralysis, the finance minister also highlighted its failures in terms of key bills on insurance, direct taxes, goods and services tax that did not get enacted.
Lambasting the Opposition for stalling the roll out of the Goods and Services Tax, he called for support from all political parties to pass the GST Bill and the Direct Taxes Code in FY15.
I am disappointed that we have not yet been able to introduce GST. I leave it to you to answer the question, who blocked the GST when an agreement on the game-changing tax reform was around the corner, he said.
To take forward direct tax reforms, the finance ministry will also put up on its website the Direct Taxes Code Bill for public comments. We have also got ready a Direct Taxes Code that will serve us for at least the next twenty years, Chidambaram said.
The minister also expressed the Insurance Laws (Amendment) Bill and the Securities Laws (Amendment) Bill have not been passed by Parliament for reasons that have nothing to do with the merits of the bills, education loans auto makers.
The 10 to-dos
Keep deficit at 3%
CAD: Promote foreign capital flows
Price stability and growth: RBI should strike balance
Financial sector reforms: Implement FSLRC report
Infrastructure: Use PPP, new financing models
Manufacturing: Waive all taxes on exports, minimum tariff protection
Subsidies: Only for deserving beneficiaries
Urbanisation: Rebuild cities, new models of governance
Skill development: Rank with secondary education
Sharing responsibility between Centre and states on funding flagship programmes