On Diwali eve, FM P. Chidambaram urges industry to invest more

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Finance Minister P Chidambaram addressing a press conference in New Delhi. (PTI) Finance Minister P Chidambaram addressing a press conference in New Delhi. (PTI)
SummaryFinance Minister re-estimates CAD will be reined in at $60 billion this fiscal.

and it will get reflected in the CAD,” he said.

In a similar vein, PMEAC chairman C Rangarajan said in Kolkata on Friday: “If the present trend in exports and imports continue, the current account deficit may remain well below $70 billion. Capital flows will not only be adequate to cover the deficit but may even add to reserves.”

Rangarajan pointed out that over the next few years India needed to take the CAD to a more comfortable level of 2.5% of GDP. “The level of comfort is related to the capital flows that can come in without any extraordinary efforts,” he said.

Chidambaram said his personal view is that the rupee, which traded on Friday at 61.74 against the dollar, was slightly weaker than “appropriate exchange rate” although he hastened to add there was nothing called appropriate exchange rate. He expressed satisfaction that the rupee has stabilised.

The minister was also hopeful that the still high wholesale price-based inflation, 6.1% in September, will see moderation because of the good monsoon, the fiscal discipline of the government and the steps taken by the Reserve Bank of India. “What we can do, we will do in terms of the fiscal policy, what can be down through monetary policy, the RBI will do and what we can do with our food stocks, we will do,” he said.

Chidambaram said the bumper crop this year would boost agriculture GDP growth this year. Last month, the PMEAC projected 4.8% growth for agriculture in 2013-14, compared with just 1.9% last fiscal, thanks to good monsoon rains.

The economy grew just 4.4% in the quarter through June — the slowest quarterly expansion in four years — as manufacturing and mining contracted. Chidambaram pointed out that although manufacturing sector growth appeared poor, certain sectors such as automobiles showed higher exports in the first half. Passenger vehicles export grew 13.7% in the period. “If any sector needs any specific measures and if the department of industrial policy and promotion proposes, we will look into it,” he said.

“The RBI estimates GDP growth for 2013-14 at 5%, I have estimates from the PMEAC which

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