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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