Union Finance Minister Shri Pranab Mukherjee has expressed confidence in
reducing the fiscal deficit and achieving the target of 4.6 % of GDP
announced in the 2011-12 budget. He said that the provisional figures
for 2010-11 have given us strong reason to be hopeful in this regard.
The Union Finance Minister, Shri Pranab Mukherjee was speaking in a
meeting, here today with a large group of more than 30 of the leading
Indian and foreign institutional investors.
Striking an optimistic note on the trajectory that the economy is
taking, the Finance Minister Shri Mukherjee said that the economic
growth this year could be around 8.5 %. He said that the revenue
collection is not likely to see any decline and hence there need not be
any undue fear on the issue of fiscal deficit.
On the issue of fuel subsidy, the Finance Minister Shri Mukherjee said
that it is difficult to accurately estimate the burden on the
government, especially in view of the volatility in the international
crude prices. However, if there is any requirement of additional
subsidy, funds would be committed with least impact on the fiscal
deficit, the Minister added.
On the issue of the government achieving its disinvestment target, the
Finance Minister Shri Mukherjee said that it would also be too premature
to reach a judgement as only the first two months of the financial year
have gone by. Underlining the resolve of the government to pursue the
issue of disinvestment, he stated that the public issue of Power Finance
Corporation was already completed in the month of May 2011 and the
government has raised Rs.1,145 crore on account of this. The Finance
Minister reminded the investors that the disinvestment programme in FY11
was not pursued with extra vigour as the 3G/BWA spectrum auctions had
brought in higher revenue than expected.
Referring to inflation, the Finance Minister Shri Mukherjee said that it
is likely to be moderate in the months ahead especially as the monsoons
are expected to be normal strengthening the economic prosperity of the
farmers. As regards FDI in insurance and retail, the Finance Minister
Shri Mukherjee assured the gathering that the consultations are underway
and the Central Government would take all efforts to build a consensus
in the matter.
The Finance Minister Shri Mukherjee urged the institutional investors to
remain optimistic and take a long-term view of the economy and its
performance rather than being disturbed by the short-term statistics. He
stated that next generation financial sector reforms have already been
initiated which include among other steps, the widening and deepening of
the Indian securities markets, liberalising the policy on foreign
capital flows, strengthening the regulatory and other institutional
architecture and reducing transaction cost in the securities markets.
Replying to a host of questions from the investors, the Finance Minister
Shri Mukherjee stated that the Indian growth story is robust and that
the government is committed to doing all that is necessary to achieving
and sustaining a higher economic growth rate. He assured the
institutional investors that the government would continue to take
investor friendly policies to encourage further growth.
Adviser to Finance Minister, Mrs. Omita Paul, Finance and Revenue
Secretary, Shri Sunil Mitra, Disinvestment and Expenditure Secretary,
Shri Sumit Bose and Chief Economic Advisor, Dr. Kaushik Basu were among
the senior functionaries of the Ministry who attended the meeting. Smt.
Chanda Kochhar, MD and CEO ICICI Bank and Chairperson ICICI Securities
who moderated the one hour session stated that the investors have been
enthused by the Finance Minister’s confidence on managing deficit and
inflation and his positive outlook for the Indian economy.