New Delhi:
New Delhi: Finance Minister P Chidambaram, who presented his eighth Budget in Parliament today, held a press conference. Here are the highlights:
- I am sure you do not expect me to make another budget speech, says Chidambaram
- Important to read the Budget speech, along with the economic survey, especially the first chapter of the survey
- The economy is indeed challenged in a number of way...the survey lists the challenges, lays out various options before the government. What the budget does is pick some of the options and say this is the way we will go forward. But our work does not stop here. The budget is simply one events in a series of actions that have to be taken
- The main thrust of the Budget is that we are on the right path.
- When fiscal deficit is contained, other things will follow
- We have not come up with any surprises
- The economic space was rather restricted
- Will announce another set of reforms when the debate takes place and the Finance Bill discussion takes place
- I think we have demonstrated our capability of containing the fiscal deficit at 5.2 per cent which is below the target of 5.3 per cent
- The current account deficit can be contained only if we export more or import less ..in the short run import less is not an option...if we need edible oil, we import edible oil.
- Sometimes we import things we do not need, such as gold. Therefore in the short run, it is not easy to reduce imports.
- In the medium term, we can reduce the imports if we increase the production. In the medium to long run the only way to control the current account deficit is to improve exports.
- • I have already told the Cabinet as well as the minister for commerce that he will fully support all measures to give a boost to exports in the amendments to the foreign trade policy.
- • There are many things I would have liked to say (in the Budget) but could not because of lack of time. These are issues that are progressing. When I am replying in Parliament another set of decisions and measures will be announced.
- It's not a one stop exercise when you come to Parliament and then say let's meet again next year.
- Current account deficit is a little more tricky
- The way to manage current account deficit is to push exports
- Imports may be reduced in the medium term
- We will turn when the investment cycle picks up
- We are following a fiscally prudent path
- Fiscal deficit will be contained and other deficits will be contained in due course
- Monetary policy can do only so much on taming inflation, fiscal policy also has to be prudent and do its part
- On Inflation: Monetary policy and fiscal policy have to go hand in hand. I think 2013-14 will be a better year in terms of growth, in terms of inflation control, in terms of investment. The chief economic advisor has predicted that growth next year will over 6 per cent. Once growth moves over 6 per cent, it is a sure sign that the economy is on the way of recovery. And then a year after in 2014-15, we must aim to move to a growth rate of above 7 per cent.
- Growth means something only if it brings some material relief to the people - jobs to those who are unemployed, security to those who are insecure. God to a hungry man is the form of food. So growth must mean something material to the people. I hope next year there will be more access to education, healthcare, food. That is the test of good governance.
- The fuel subsidy will be lower because we have capped prices
- Food subsidy expected to be Rs. 80,000 crore. But if the food security Act needs more money, we will definitely provide more money.
- As far as tax revenues are concerned, when the economy is growing at 5 per cent, still tax revenues are growing at 16.7 per cent. So next year, there will be more growth in tax revenues next year with higher economic growth.19% growth rate in tax revenues.
- GAAR: Section 90A is broken in 2 parts. The first part is with GAAR, which is not relevant as GAAR will come in in the 2016. The other part has been brought into the Act now, last year it was in the memorandum.
- GST/DTC: On DTC, we have set a deadline of ourselves. Hope to bring back the DTC Bill to Parliament by the end of the Budget session.
- On GST, I cannot lay down any deadline, it depends on the state finance ministers. I have accepted the minutes forwarded to me by Sushil Modi and to show my commitment to the GST. I have set aside Rs. 9,000 crore as the balance instalment. If they are willing to take one step forward, so will we and if we reach a consensus we should have a draft amendment in months.
- Vodafone: Vodafone has now suggested conciliation. It will go to the Cabinet. If the Cabinet approves, it will go to conciliation and not an arbitration.
- By definition, conciliation is not binding. The conciliator helps the two sides to arrive at a solution, but both sides have to agree to the suggestions.
- On spectrum auction: Revenue from spectrum will be more. This year we got a minor amount of Rs. 1,000 crore
- At the moment, there is uncertainty about the auction of spectrum, but it will be auctioned, may not be in the second round, and if a serious telecom player wants to remain in the Indian market, he must acquire spectrum
- Cannot transfer all subsidies in one go. Step 1: digitization of beneficiary, which is more or less done. Step 2: bank accounts for the beneficiaries. The banks have told me they will go ahead with it once they get the list of beneficiaries, says Chidambaram. Step 3: the Aadhar number
- Disinvestment target for next financial year is Rs. 40,000 crore. Of this, Rs. 14,000 crore is from the sale of the government's residual stake in non-government organizations.
- I got advice that at the end of the year the GDP will be 5.5%. In the first part of the year the growth rate was 5.4 per cent. 4.8 per cent is the red line that cannot be breached for next year.
- Super rich: I wish I was too...I want everyone in this country to aspire for higher incomes and higher quality of life. Our tax rates are competitive and comparable with other countries. The surcharge we have imposed is only for one year, and that adds a small cost to not somebody who is making losses or making a Re 1 profit, but on somebody who is making a Rs. 10 crore profit, and I am sure they will pay cheerfully because it is only for one year.
- The Budget will pass, no need to have any concern. The Finance Bill will also be passed. Let us debate in Parliament, we will answer their concerns in Parliament, I am confident that the Budget will be passed. We will explain why the Budget is not anti-poor (referring to the Samajwadi Party)
- There is a bias against lending to women. The women's bank will lend mostly to women. Anyone can make deposits but it will employ mostly women. This bank will be a reality by October.
- I don't think we should get into a debate on whether the Budget was populist or not. People know what's good for them...When the right time comes they'll vote the party they think will be good for them. Last time, they must have thought that UPA is good for them, and that's why they voted for us. I am totally confident that the people will come to a conclusion that UPA is the best.