With the nation under peak election fever, Finance Minister P Chidambaram diverted the attention on the economy by claiming on Saturday that it is going to become stronger owing to the efforts made by the UPA Government.
Speaking to media persons in the Congress headquarters, he said that the current account deficit (CAD) has been brought down significantly to $32 billion and fiscal deficit contained within the target in 2013-14.
Chidambaram, however, said there has been shortfall in overall tax collection in the last fiscal. “We are completely satisfied that we will achieve the fiscal deficit target as projected in the interim budget (4.6 per cent of GDP during 2013-14). The news on CAD is of course extremely good. The CAD for the year that ended will be only $32 billion as against the previous year's $88 billion,” he said.
The CAD has not only been fully and safely financed but $28.5 billion has also been added to the reserves, the minister claimed. The CAD in 2012-13 was at 4.7 per cent of GDP and in 2013-14 it will only 1.7 per cent, the Finance Minister said.
“So these are good signs...The economy going forward can only become stronger,” the Finance Minister noted. To a query on recent rise in stock market and Modi factor, Chidambaram said, “if you attribute every rise to quote unquote to borrow your language 'Mr Modi is coming' then every dip must also be attributed to Mr Modi is coming. Please don't make that fatal mistake. What has this got to do with who is going to be elected on May 16 (the vote counting day).”
He said what is happening in the capital market is a reflection that investors are becoming more confident about the stability and strength of India's economy. Talking about tax collections, Chidambaram said the revenues are “more or less as expected”.
In the direct taxes segment, government has collected about Rs5,500 crore more than the revised estimate ( Chidambaram further said the slowdown in the economy was caused by high government expenditure, fiscal deficit and CAD, and consequent inflation.
“So in the last 20 months my job has been to attack the problem. We have attacked the problem of fiscal deficit. We have attacked the problem of CAD. Both have been contained. Once these two problems are contained, going forward you will find that investment would pick up, both domestic and foreign investment will pick up,” the Finance Minister added.
He also said the Cabinet Committee on Investment (CCI) chaired by Prime Minister Manmohan Singh has speeded up implementation of large infrastructure projects. The CCI and project monitoring group (PMG) has been an outstanding success, he said. “I am very happy that the idea of CCI has now been vindicated.
The greater vindication is coming from the fact that 15 states have come to the Cabinet Secretariat seeking advice and guidance on how to set up similar PMGs in respective states. I sincerely hope that every state will set up a cabinet committee and a PMG for projects that are being implemented in their states, he added.
Out of these 169 projects taken up by the CCI, in 108 projects “we have almost completely resolved the outstanding issues... (and) as a result... These projects are moving forward”, he said.
Fresh loans to the extent of Rs1,02,292 crore have been released to the project promoters. Of all the 169 projects, the total project cost is Rs8,37,632 crore and the loan sanctioned by banks to these projects is Rs 2,92,658 crore. The outstanding loan as of Feb 28, 2014, was 2,28,288 crore, which means roughly 70 per cent of the sanctioned loan has been disbursed, Chidambaram added.