We will not cross red line of fiscal deficit: Chidambaram on Google+ Hangout
Finance Minister P Chidambaram in a, Google+ Hangout today responded to queries of citizens about the Budget and discussed the Indian economy with a panel of industry leaders. Live video cast insidedelhi Updated: Mar 04, 2013 21:54 IST
Finance Minister P Chidambaram in a, Google+ Hangout on Monday responded to queries of citizens about the Budget and discussed the Indian economy with a panel of industry leaders.
In his first Google+ Hangout interaction, Chidambaram on Budget, said the government has done all that could be possible given the constrained world economy.
Answering to a citizen's question, Chidambaram said, the EuroZone is in recession - Germany, UK have contracted in the last quarter and "We are trying to stabilise our economy and get the growth engine started".
"In 6 years we have grown by over 8% This year we slipped to 5% but we can climb up again We have not gone so very wrong that we have to wear sack-cloth and ashes", he added.
The finance minister was joined by panelists -Jahangir Aziz, senior Asia economist and India chief economist, JPMorgan; Anand Mahindra, chairman and managing director of Mahindra & Mahindra; and Amit Singhal, senior vice-president, Google.
Answering a query on current accoutn deficit, the finance minister said the figure is likely to be less than the provisional figure of 5.2% announced in the Budget.
"We will not cross the red line of fiscal deficit. It will be kept at 4.8% or below."
To cut down current account deficit, P Chidambaram suggested that if gold is not imported for one year, half of the deficit will disappear, and the only way to meet the target is to increase exports.
Current account deficit, a representation of difference between inflows and outflows of foreign currency - had touched a record high of 5.4% of the GDP in the July-September quarter.
On disinvestment, he informed a citizen, that this financial year, the government has so far raised Rs. 21,500 crore against the target of Rs. 30,000 crore and the government would try to raise Rs. 27,000 crore in this financial year.
"We will raise Rs. 40,000 crore via disinvestment in the coming fiscal year (2013-14) ... Will raise Rs. 14,000 crore more by way of selling residual stake of the government in non-government companies," he added.
"Why should capital gains not be taxed if everything else is. I don't think there is a case to say that capital gains should not be taxed. Every kind of income must be taxed except for things like old-age pension. I think it's a fair policy, but I'm open to suggestions on this, " Chidambaram said when asked about tax on capital gains.