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Cheering the Finance Minister's assertion that current account and fiscal deficits will be contained in 2013-14, industry body Assocham today said that taming inflation holds the key to getting back on the high growth trajectory.
"These assertions come on top of the core industrial sector putting up a robust growth of 8 per cent and the return of FIIs (foreign institutional investors) in the stock market. Once we are able to tame inflation, we will be back to the robust India growth story," Assocham Secretary General D S Rawat said.
Finance Minister P Chidambaram today said India will have a bumper harvest and the troublesome current account deficit (CAD) will come down to USD 60 billion because of rising exports and declining gold imports.
"I am confident that we will be able to adhere to the red line on the fiscal deficit," Chidambaram said at a conference.
"We are confident that the measures taken by the RBI and our own measures at maintaining fiscal discipline will eventually bring about a moderation of inflation," he added.
The Minister also expressed the government's resolve to extend full support to new investment proposals and said that corporates need not sit on cash. He asked them to start investing.
"The efforts to unblock major investment projects are laudable," Rawat said.
The industry is also happy that the government would make all out efforts to get passed by Parliament key financial reforms bills like Insurance and SEBI in the coming session of Parliament, he added.
Chidambaram had said the government will endeavour to get the long-pending insurance amendment bill, which seeks to raise the FDI in the sector to 49 per cent from 26 per cent, passed in the forthcoming Winter Session of Parliament.
As regards the Direct Taxes Code (DTC), he said the draft amendments have been finalised and would be placed before the Cabinet for approval.
The CAD deficit touched the all time high of USD 88.2 billion or 4.8 per cent of the GDP in 2013-14.
Reflecting a pick up in the industrial activity, the core sector industries recorded 8 per cent growth in September, highest in the past 11 months.