We’re aiming at restraint, prudence and patience: Chidambaram

NEW DELHI: Finance minister P Chidambaram said on Thursday that the fiscal deficit estimate of the government was credible and had been arrived at after months of work. Addressing a news conference shortly after presenting the budget he said the budget’s main thrust is to signal to the world that India is following a fiscally prudent path. Excerpts:
On the economy, exports:
The economy is indeed challenged.Challenged in a number of ways. The economic survey lists the challenges. It lays out the options before the government. What the budget does is pick on some of the options and say these are the ways we will go forward. But I said in the last few paragraphs of my budget speech our work does not stop here. The economic space was rather restricted. Given the restricted economic space there is no scope for largesse at the same time there is no scope for imposing huge burden on anybody. That’s why I said we are trying for prudence, restraint and patience. The main thrust of the budget is to signal to the world and everyone else that we are following a fiscally prudent path. The fiscal deficit will be contained. If the fiscal deficit is contained other deficits will be contained in due course. In the medium to long term the only way to contain the current account deficit is to improve exports.
If our exports grow at the same rate as our imports or faster than our imports are growing then we can pay for our imports. Then the current account deficit becomes manageable. I have already told the Cabinet as well the minister for commerce that we will fully support measures that he will announce by the 31st of March when he amends the foreign trade policy. We will fully support all measures which will give a boost to exports.
On the fiscal deficit reduction plan
I think the numbers are credible. We have worked on the numbers for the last couple of months. You have looked at the numbers for the last couple of hours. The numbers are absolutely credible. The fuel subsidy bill is likely to be smaller because we are correcting diesel prices. We have capped LPG at nine cylinders. Therefore, there is every reason to believe that fuel subsidy will be lower this year. On the food subsidy also we have made calculations and normal food subsidy is expected to be Rs 80,000 crore and over and above for the Food Security Act we have provided Rs 10,000 crore. If the Food Security Act requires more money we will certainly provide more money. That is a question that has to be addressed after the Food Security Act is passed. I don’t have a bill before me so I can’t say what it will cost. As I speak to you I think we have made a correct assessment of the subsidy bills.
On Goods & Services Tax (GST) and Direct Taxes Code (DTC)
On DTC we have set a deadline for ourselves. I have said that I hope to be able to bring back DTC bill to parliament by the end of the budget session. We are working on the DTC we will bring back the bill to parliament. As far as GST is concerned I cannot lay down any deadline. It depends on the state finance ministers. If they are willing to take one step forward we are willing to take one step forward. We are ready and willing. There is no reason why GST should be delayed.
On Vodafone retrospective taxation issue
We cannot discuss case specific matters. We have had discussions. Vodafone has offered conciliation. As I said to the media 10 days ago that matter will go to the cabinet. If the cabinet accepts the offer of conciliation it will go for conciliation.
Union Budget 2013
Budget news 2013
Economic Survey