In UPA-II twilight, FM P. Chidambaram hopes for UPA-III

May 09 2014, 02:00 IST
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Chidambaram added that foreign direct investment inflows in 2013-14 would be over $27 billion against $26.95 billion in 2012-13. Chidambaram added that foreign direct investment inflows in 2013-14 would be over $27 billion against $26.95 billion in 2012-13.
SummaryPrescribes investment pill to revive growth.

Amid talks of an ‘enlarged’ UPA-III, finance minister P. Chidambaram on Thursday claimed that Congress still has a “very good chance” of forming a government with some allies under its leadership, and stressed the need for encouraging more foreign and domestic investment to boost growth.

Maintaining that the economy has stabilised, he said the capital expenditure of 23 public sector undertakings, including ONGC, IOC, NTPC and Oil India, will jump to R1.33 lakh crore this fiscal from R1.25 lakh crore in 2013-14. The GDP growth is seen at 4.9% (advance estimate) in 2013-14, and projected to go up to 5.5% this fiscal.

“If Congress is in a position to form a government, it will come forward...”

Speaking to the media at the AICC headquarters, he pointed to “the vast difference” in the political scenario since the 1989 general elections, when Rajiv Gandhi decided to sit in the opposition despite being able to garner around 190 seats.

On the economy, Chidambaram said the RBI was now more conscious than before that reining in inflation and boosting growth are equally important for the economy, and expressed confidence that the central bank will keep that in mind while deciding the policy rate.

On reports that a Narendra Modi-led government might change the RBI governor, Chidambaram cited Raghuram Rajan's “outstanding” credentials and said the new government must respect Rajan's appointment.

On the issue of banks’ capitalisation, the minister said the capital requirement of banks this fiscal was estimated at R45,528 crore against R14,000 crore in the previous financial year and the R11,200 crore allocated in the interim budget.

On exchange rate, he said the rupee’s level of 60 to a dollar was an “accurate” valuation of the domestic currency, adding its value is market-determined. Chidambaram added that foreign direct investment inflows in 2013-14 would be over $27 billion against $26.95 billion in 2012-13. During April-February last fiscal, FDI inflows were $26.9 billion.

Chidambaram said inflation was attributable mainly to expensive food items, and added that the open market sale of grain was a way to cool prices.

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