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Still have good time to make up the shortfall: Chidambaram

Special Correspondent
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‘Disinvestment process will start and spectrum auction will also continue’

Finance Minister P. Chidambaram flanked by Minister for Communication and IT, Kapil Sibal, and Minister for Information and Broadcasting, Manish Tewari, at a press conference in New Delhi on Fiday. —Photo Rajeev Bhatt
Finance Minister P. Chidambaram flanked by Minister for Communication and IT, Kapil Sibal, and Minister for Information and Broadcasting, Manish Tewari, at a press conference in New Delhi on Fiday. —Photo Rajeev Bhatt

Even as the 2G spectrum auction elicited a tepid response from telecom companies, the government on Friday expressed cautious optimism on being able to meet the fiscal deficit target.

Addressing a press conference after his meeting with Chief Ministers of northern states, CMDs of public sector banks and financial institutions here, Mr. Chidambaram said: “There is still time and I don't think we should spread pessimism or cynicism. Disinvestment process will start and the spectrum [auction] process will also continue”.

Although, owing to the poor response, the government could manage to mop up a meagre Rs. 9,407 crore through the spectrum auction as against a target of Rs. 40,000 crore, Mr. Chidambaram asserted that there was still good time to make up the shortfall. “We still have good time of four-and-a-half months and, therefore, it is too early to say that we won't reach the target. It is my intention to reach the target,” he said.

Budgetary target

As of now, even as not a single rupee has been garnered through sell-off of the Centre’s equity in public sector undertakings (PSUs) this fiscal, the government is sticking to the budgetary target of mopping up Rs. 30,000 crore by way of the disinvestment programme. However, the fiscal deficit target has been revised lower at 5.3 per cent from the budgeted 5.1 per cent of the GDP (gross domestic product) in 2012-13.

On the state of the economy, Mr. Chidambaram admitted that it is “challenged” but stressed that the situation was much better when compared to other global economies. “Only this morning you have read that euro zone is formally in recession. We are nowhere near that situation. Indian economy is still growing at 5.5 per cent… second quarter [GDP growth] number will be known by end of this month. And I think there will be a pick-up in third and fourth quarters,” he said.

Expressing confidence in a turnaround and noting that he would endeavour to “present a more balanced Budget” for 2013-14, the Finance Minister said: “Our goal is to tide over this difficult period and end the year on [a] reasonably satisfactory note…I hope that growth will revive and move on to the high growth track,” he said.

In this regard, Mr. Chidambaram stressed that the government would require the cooperation of all political parties and sincerely hoped that they would appreciate the economic situation and provide support in carrying forward the heavy economic agenda in the forthcoming session of Parliament.

Among the major economic measures that await Parliament’s nod during the Winter Session beginning November 22 are amendments to the Insurance Bill to raise the foreign direct investment (FDI) cap from 26 to 49 per cent, the Banking Regulation Amendment Bill and the Direct Taxes Code (DTC) Bill.

"We sincerely hope that the forthcoming session will be a productive one and many Bills will be passed...My suggestion is that not one issue should be blown out of proportion. There are many very important issues that concern the welfare of people and future of country,” Mr. Chidambaram said.

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