Finance Minister P. Chidambaram, on Thursday, expressed optimism over the Indian economy continuing to growth ‘at a healthy rate’ and defended some of the tough decisions taken by the government in the recent past saying that some measures may have caused ‘immediate pain’ but they were necessary to contain the fiscal deficit.
Addressing the 57th meeting of the National Development Council (NDC) here, Mr. Chidambaram said: “It was imperative to contain the fiscal deficit by augmenting resources and controlling expenditure…some measures may cause immediate pain but this was necessary to ensure that the fiscal deficit came down to three per cent in the next three years.”
Ostensibly, the Finance Minister was referring to the hike in diesel prices by over Rs.5 a litre and the cap imposed on the number of subsidised LPG cylinders to six per family in a year as ‘some measures’ which led to vociferous protests in and outside Parliament.
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“Steps were also being taken to contain the current account deficit (CAD),” Mr. Chidambaram said while stressing the need to control gold imports. Gold imports worth a massive $64 billion contributed in a large measure in widening CAD.
However, expressing optimism that the Indian economy would continue to grow at a healthy rate — despite the global economies facing recession — Mr. Chidambaram said this was because “our economy has strong fundamentals and factors such as high savings rate, growing services sector, a large middle-class which continues to create demand and technical and qualified manpower and the youth.”
Dubbing the Direct Benefit Transfer scheme as a ‘game changer’, Mr. Chidambaram asked the States to adopt the programme as it sought to provide a technology-enabled platform to transfer benefits in an efficient manner directly to the people. “The Direct Benefit Transfer will be a game changer and it will be a transform the way in which subsidies are managed and will be past breaking for governance,” he said.
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Amenable subsidies
In the initial phase, subsidies relating to petroleum, food and fertilizer would not be distributed through this scheme and only those schemes which are amenable would be taken up, he said.
Mr. Chidambaram also lauded State governments for containing the fiscal deficit to 2.1 per cent of the GDP (gross domestic product) and also for generating revenue surplus of 0.75 per cent.