Monday, October 29, 2012

Government unveils medium term fiscal plan


Indian Finance Minister, P Chidambaram at a press conference unveiled a medium term fiscal consolidation plan to sharply reduce fiscal deficit to 5.3% of the GDP and reduce it to 3% by 2016-17.

The minister said the government will protect all its flagship programmes for the poor. But did not indicate any plan to decontrol fuel prices, which creates a big dent in the government’s finances. Minister expressed confidence that the CAD will be fully financed by capital inflows through foreign direct investments, foreign institutional investments and external commercial borrowings.

The Reserve Bank of India, which has time and again asked the government to take corrective measures to arrive at a credible path to fiscal consolidation, is reviewing its monetary policy tomorrow. There are expectations that the central bank may cut its policy rate.

Read lot more in Rubber4U – 1st November 2012 issue

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