Fiscal consolidation will bolster economy, foreign investment: Chidambaram
"It is expected that the move towards fiscal consolidation will impart confidence in the economy, support domestic and foreign investments and will boost supply side initiatives," he said while addressing the RBI board here.
Chidambaram said the Budget 2013-14, presented against the backdrop of a slowdown in both global and domestic economic growth, is expected to lay the foundation for a sustainable re-balancing of government finances.
Among others the meeting was attended by RBI governor D Subbarao, Deputy Governors K C Chakrabarty, Anand Sinha, H R Khan and Urjit R Patel.
Elaborating on his budget proposals, the Minister said 15 per cent investment has been given to give a boost to the manufacturing sector.
"The Budget also focused on infrastructure investment to restart the growth engine and it has addressed divergent constraints in this regard," he said.
To protect savings from inflation, especially those of the poor and middle classes, the Budget has announced various measures including the introduction of inflation indexed bonds.
"These measures would also incentivise the household sector to save in financial instruments rather than purchase gold," Chidambaram said.
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