Finance minister P Chidambaram on Monday said the government was ready to take additional policy measures by October 30 to step up sagging growth. The Union cabinet is expected to clear more proposals on September 20, a move that would boost sentiments and give confidence to investors.
However, while speaking to television channels, he noted that it was too early to give an estimate of the GDP growth for the current fiscal.
Last week, the government had opened the gates for foreign direct investment in multi-brand retail and civil aviation.
Underlining that the fiscal slippage would not be very wide during the current fiscal, Chidambaram said the road map to fiscal consolidation plan would be unveiled in the coming days.
He lauded the Reserve Bank of India's decision to reduce the cash reserve ratio — the proportion of money the banks have to park with the central bank — by 0.25 percentage point. He said the RBI, which would announce its next monetary policy on October 30, would be in a position to play a more supportive role as the government would take several more steps towards fiscal consolidation. The RBI's move would inject Rs. 17,000 crore into the system thus easing liquidity.
"I am very confident that between now and October 30, since the government is expected to take a number of additional policy measures and also lay out the path for fiscal correction, the response of RBI on October 30 will be far more supportive of growth."
Chidambaram also said the government was expected to meet the disinvestments target of Rs. 30,000 crore for the fiscal.
The finance minister also said that a final decision on the controversial General Anti-Avoidance Rules (GAAR) would be taken after Parthasarathi Shome panel submits its report.
While India registered a GDP growth of 6.5% in 2011-12, it was 5.5% during the April-June quarter of the current fiscal -- lower than 8% recorded in the corresponding period of the last financial year.