Chidambaram sees rosier times ahead

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Nov 02, 2013 02:41 IST

As the Sensex touched a record new high, finance minister P Chidambaram said on Friday that India's current account deficit (CAD) was expected to fall to $60 billion in 2013-14, much lower than the earlier estimated $70 billion.

The deficit, which measures the gap between net foreign exchange inflows and outlflows in a year, roiled the rupee this year, taking the currency to its historic lows.

The CAD stood at $88.2 billion, or 4.8% of the GDP in 2012-13.

Chidambaram also said the nation was also set to show a bumper harvest on the back of strong monsoon rains this year, while there was cause for cheer on the infrastructure front in the data on Thursday that showed eight core sectors reporting an average growth of 8% in September, compared with 3.7% in August.

These sectors account for 38% weightage in the overall industrial growth index.

"Core sector growth...strong monsoon and healthy exports augur well for economic growth. There are still many challenges, most important being inflation and reviving investment...but I think there will be green shoots even in investment," Chidambaram said while addressing the press.

Despite a shooting up of the fiscal deficit in the months so far, expenditure would be controlled and its figure would be contained at 4.8% of the GDP, he said.

"I think there will be green shoots even in investment. We are confident that the measures taken by the RBI (to control inflation) and our own measures at maintaining fiscal discipline will eventually bring about a moderation of inflation," he said.

Urging companies to start investment, Chidambaram said the government will extend its support to new investment proposals. "Issues relating to 99 projects have been resolved with a total investment of Rs 3.67 lakh crore," he said.

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