P. Chidambaram breaks silence, says Indian rupee undervalued, pessimism unwarranted

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P Chidambaram: There was - and is - no intention to introduce any type of capital control, including controls on repatriations. P Chidambaram: There was - and is - no intention to introduce any type of capital control, including controls on repatriations.
SummaryIndian rupee lost massive amounts of value over last 4 days, but FM pans the panic in market.

CAD is narrower. We are exploring structural measures to further reduce CAD to sustainable levels and, in the meantime, to improve capital flows," he said, adding that growth promotion will continue to be the focus of the government.

"Stronger growth will, in the course of time, alleviate many of the challenges that we face," he said.

Growth in the first quarter of current fiscal is likely to remain flattish, Chidambaram said.

"We are in better health than many other countries of the world... we expect growth will pick up in Q2 to Q4, he added.

India's debt indicators, he said, were within the prudent limits. "The overall public debt to GDP ratio has declined from 73.2 per cent in 2006-07 to 66 per cent in 2012-13. The economy's external debt is only 21.2 per cent of GDP. India's reserves are USD 277 billion," he said.

The minister reiterated that government will make all efforts to contain fiscal deficit at 4.8 per cent and CAD at 3.7 per cent of GDP or USD 70 billion this year.

"The figures suggest that CAD could be even lower than USD 70 billion," he said.

Admitting that there is a rise in non-performing assets of the banking sector, Chidambaram said the government is making efforts to push stalled projects.

He said all banks have a capital adequacy ratio higher than the Basel norms and the government intends to infuse Rs 14,000 crore this fiscal to capitalise the PSU banks.

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