Finance Minister P. Chidambaram has said that India is shoring up its forex kitty to deal with the impact of U.S. tapering, and expressed confidence that growth will revive in the second half of the current fiscal.
“Tapering will start. I think (U.S. Fed Chairman) Ben Bernanke hinted again that tapering will start. We are in fact prepared for tapering... we are preparing for tapering...So we are taking a number of steps to shore up foreign exchange reserves,” he told CNBC-TV18 in an interview.
“I think this time Ben Bernanke will be a little more careful, more calibrated and he will perhaps communicate his actions well in advance”, he said.
Answering questions on growth prospects, Mr. Chidambaram said. “Let us wait to see what Q2 brings, and I am sure the second half of the year that is Q3 and Q4 will be much better than Q1 and Q2.”
Growth has dipped to decade’s low of 5 per cent in 2012-13. “True, in the Q1 of 2013-14, growth slowed down to 4.4 per cent, but unless there is a further slowdown, why should I lower it below 4.4 per cent? It can only be up from 4.4 per cent”, he said.
Mr. Chidambaram had earlier questioned the move of the International Monetary Fund to lower the growth forecast of the current fiscal to 3.8 per cent from 5.6 per cent in July.
“We do not share this pessimistic outlook. We also believe there is a need for reviewing the methodology for growth projections as in the past International Monetary Fund projections have often been at divergence with final growth numbers,” he had said.
No question of govt taking over NSEL
Ruling out takeover of the crisis-ridden NSEL, Mr. Chidambaram has said that its parent group Financial Technologies, and another related entity MCX-SX are under watch and persons responsible for the alleged irregularities will have to pay the price.
“There is no question of the government taking over NSEL. The government is concerned about the regulated entities, one of them is MCX, which is a commodity exchange, other is MCX-SX and the other is the promoter of the MCX and MCX-SX, which is the Financial Technologies. All three are under watch”, he said in the interview. — PTI