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In a stout defence of his Budget proposals, Finance Minister P. Chidambaram on Monday declared that there was nothing that could stop India from becoming the third largest economy in the world.
In his maiden interaction with netizens on Google Hangout — the first time that any Union Cabinet Minister has done so — thereby joining the league of personalities such as U.S. President Barack Obama to reach out to the people, Mr. Chidambaram, at almost the fag end of the hangout, said: “There is nothing that can stop India from becoming the third largest economy in the world. We will be there along with U.S. and China. We have everything to get there, but won’t get there till we work hard and respect the laws of economics.”
And in this regard, as if almost thinking aloud, the Finance Minister said: “We don’t have the space to do anything foolish or anything irrational. We have to ensure everybody delivers the outcome he or she is expected to. Why should it take five years to build a 1,000 km stretch of road; why should it take six years to build a power plant? Each one has to work forward for India to achieve its rightful place globally.”
Explaining the economic rationale of his Budget proposals, Mr. Chidambaram noted that his job was to look after the vast middle class, and just not the upper middle class. “In metros, while costs are rising, so are incomes. But look at the farmer, income in rural parts not rising at the same rate as in metros. Same goes for those in casual jobs. We are not a country with only the middle class. We have to tax someone to raise revenues to meet broader objectives,” he said.
Rebutting some of the post-Budget criticism over his tax proposals, the Finance Minister pointed out that since millions of Indians are still poor, some tax will have to be collected. “If you are buying a mobile phone worth Rs. 6,000, there is nothing wrong being prepared to pay Rs. 300 more. Same goes for eating out in air-conditioned joints,” he said.
On the issue of the high Current Account Deficit (CAD), Mr. Chidambaram pointed out that growing exports was the only way out of the CAD problem. “We have many economic zones, but companies have to come up and set up units in those zones. Companies are sitting on piles of cash. I will meet individual business houses to know their capex plans. We will do everything to boost manufacturing.”
He also reiterated that much of the problem was on account of rising imports of gold. “There are many imports that India cannot do without. But one import that India can do without is gold. If we do not import gold for a year, current account will come down by half,” he said.
In response to the active participation by the youth in his Budget analysis, Mr. Chidambaram said the younger generation was much more informed and knowledgeable and saw a great future for internet in India. “We will need to strengthen broadband connectivity across the country. We may even see a virtual political party in India, with virtual members,” he said.
Keywords: Indian economy
Yes! definitely we will be the third largest economy and i am sure no one would dare to stop it. The very term "largest economy" is such a misnomer because it is based on the GDP of the country. GDP includes all the buying and selling potential of the country, esp India which has nearly 1.3 billion but considering the GDP per capital (PPP) we rank 125 according to World Bank and 130 according to IMF. We still have to heavily improve the standard of living of a normal Indian citizen let alone the stalwarts of Politics, Cinema, Cricket and Corporates. Politicians stop using those fancy terms (largest economy) , esp. Mr Chidambaram, graduate from Harvard Business School.
In Tamilnadu the railway line from Chennai to Kanyakumari is still single line. They have been working on the doubling of the Railway line for the last 20 years. They still have not completed it. Come on , Don't beleive FM of India.
In cities incomes are rising along with prices? Where does this guy get his statistics? Sounds rather like the French Queen asking why the poor don't eat cakes if they can't have bread, doesn't it?
FM’s queried why it should take five years to complete a stretch of 1000 km.. This is a relevant question and needs to be addressed in the light of the advancements around us even if it becomes a long and envious lament. China has overtaken US in its highway network. It has laid a railline over the highest terrain on the planet. It envisions a rail service from Berlin to Beijing via Istanbul and Baghdad. It has laid a highway upto its ‘Tibet province’ from Beijing which would soon reach Lhasa. It is planning a rail line from Kunming to Ramree island on Burmese coast on the BoB via Mandalay with a train service to Kolkata, the journey taking just 3 or 4 days. It is planning a rail line trough Columbia as a rival to Panama Canal for linking Atlantic and Pacific oceans to boost its trade. See, however, the situation nearer home. Govt. is busy on how to dismantle the “Raamar Palam” in Palk Straits while more effective peninsular railline connections would suffice.
In spite of corruption, poverty-stricken, unsafe, biased society and
unemployment, India is going to be the third largest economy. How lame!
Yesterday FM queried why it should take five years to complete a stretch of1000 km. China has overtaken US in its highway network; It has laid a railline over the highest terrain on the planet. It envisions a rail service from Berlin to Beijing via Istanbul and Baghdad. It has laid a highway upto the Tibean border from Beijing and would soon reach Lhasa. It is planning a rail line from Kunming to Ramree island on Burmese coast on the BoB with a branch rail service to Kolkata. It is planning a rail line trough Columbia as a rival to Panama Canal for linking Atlantic and Pacific to boost its trade with the SA. At home we are diverting our energy on how to dismantle the Ramar Palam. At the rate in which we sanction new rail lines, and with measly annual allocation it should take 150 years to complete projects.China is about to merge railways with the transport ministry. Let us atleast have a GoM for transport infrastructure with PC heading it.
FM is saying that he has given a lot to the middle class by increasing spending in education and health sector as well as reducing tax benefit of rs 3000.but one irony is that he has increased spending by 5% while inflation was hovering at 7%.The sectors are growing at 30-36% with a need for increasing investments.There is a major flaw.A budget should lay focus more on effective utilizing of funds rather than increasing spending which is not focused.How about taxing rich farmers who enjoy tax holidays and subsidies and broaden the tax base???
>there was nothing that could stop India from becoming the third >largest economy in the world. Except your colleagues, Mr. Chidambaram, the politicians.
You speak about taxing the rich to save the poor. A more sensible plan would be to eradicate corruption, which will automatically free up the money that needs to go to the poor. And we all know how much much interest you have in that, the way the Anna movement was derailed by the government.
Yes, India has the potential just like China has. But politicians having an eye only on kickbacks and commissions are putting back India in this journey.
The FM has many good points, but he should stress on the importance of the efficiency with which government uses the tax payer's rupees. The government cannot be frivolous in allocation of funds, keeping sick government enterprises going, and so horribly counterproductive with corrupt practices rampant. Remove corruption and make government accountable, and we will see better value for tax paying public.
This is actually a very shrewd move from the finance mininster.
Throwing tax on mobile phones, eating at food joints and even movies. The current generation cant do without all these and wont mind spending on the same even if taxes are levied. So more money will go to the government. Hence more scams, more breaking news.
Good going Mr. Minister. India will surely rise to your claim of the third largest economy.
India is in a soup because of too much money chasing the same group of people namely the upper & upper middle class. Too much black money was generated through propoerty transactions on top of real estate boom in last decade. A big number of people in above class do little productive work & depend on imported luxury products for daily needs. The best way to curb such behaviour is to come down heavily on high value property transactions in metro cities by imposing 10% to 50% TDS except for those for infrastructure & low cost housing. All 5 star hotels, luxury condomenium housing should be heavily taxed.
Yes there should be nothing to stop us from becoming the third largest economy in the world. Why then are we are lagging behind? It is not only lack of ministerial vision, guidance, leadership and determination but also administrative sloth. It is said that at the rate in which we sanction new rail lines, and with the measly annual allocation of funds, it would take 150 years to complete those projects. FM is right in querying why it should take 5 years to complete a stretch of1000kms highway. Five litres of fuel can carry a tonne of cargo by road 100 kms, by rail 333 km and by boat 555 km, So use resources with well-laid priority. The new leadership in China is slated to take a decision on merging its railways into the transport ministry for somewhat different reasons. The least we could do is to constitute a GoM for transport consisting of the respective ministers where infra projects are debated and decided,accelerate our projects in transport.
Import of gold may be making a big dent in the current account. But the question to
be asked is, can Indians do without gold. gold is something very close to Indians. If
govt tries to restrict legal imports, it will lead to smuggling. It is a catch 22 situation.
Secondly growth for the sake of growth is not warranted anymore. What is needed is
sustainable growth which does not harm ecology and which is not heavily relying on
realty sector. Growth of tiny sector/micro enterprises which do not rely too much on
power alone will ensure that India grows. More importantly corruption should be
rooted out for India to develop! until that evil is part of the Indian psyche,
sustainable development will just be a dream.
FM is right when he questions why we should take five years to build 1000km stretch. Adminsitrative sloth and lack of minsierial guidance, vision,judgement and drive.
“If you are buying a mobile phone worth Rs. 6,000, there is nothing wrong being prepared to pay Rs. 300 more. Same goes for eating out in air-conditioned joints,” That's utter nonsense from FM. His duty is make everything affordable to all. He is increasing taxes on every fastselling item to raise the revenue.Simply that.
Well done FM ! Hats off to you !! We can become the third largest country in the world under your leadership !!!
How can India become the third largest economy? When the silent voiceless majority are fleeced due to phenomenal price rise and by liquor against which Mahatma fought with tooth and nail, Freebies that negate the people from working How is this possible? Can some one answer me please.
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