Direct transfers to slash subsidies by up to 60%: FM

Chidambaram said there was no ground for a rating downgrade for the Indian economy, and that GDP growth will return to 8% level in 2014-15. He expressed confidence that the pending Bills on the pension and insurance sectors would be passed in the budget session of Parliament in February.

The note quoted Chidambaram promising implementation of the goods and services tax (GST) by the end of 2013 and the Direct Taxes Code by August 2013. While reduction of fiscal deficit is an overriding objective for the government, attracting domestic and foreign investment was another priority for the government.

Reviving the investment cycle was key to a gradual recovery in growth to 6-7% in 2013-14 and to 8% in 2014-15.

The finance minister said the GST implementation alone could potentially add 1.5 percentage points to GDP growth, as per the note. Chidambaram said the government was seriously considering suggestions of the Rangarajan committee to review gas prices after 2014. But he hinted that the short-term capital gains tax (STCG) on listed securities is unlikely to be removed, as the government was unable to narrow the tax base. A panel led by Parthasarathi Shome, which reviewed the General Anti-Avoidance Rules, recommended abolition of STCG on listed securities.

The minister, said the note, believed India’s potential growth is 8% and above, and that the country cannot afford to have less than 7% growth.

On issuing sovereign bonds abroad, Chidambaram said the

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