Exuding confidence that the growth rate will improve to 5.5-6 per cent in this fiscal year, up from 5 per cent last year, finance minister P. Chidambram on Wednesday stressed the need to revive investment sentiment to stem the rupee’s fall.
He also said the government will further liberalise its FDI policy, and also hinted at measures to check non-essential imports.
Speaking at a press conference to mark his completing a year as FM, Mr Chidambaram said the government will take steps to encourage public sector units to raise funds overseas. He also hinted the government may consider relaxing ECB norms.
He said the government was also considering steps to attract investments from sovereign wealth and pension funds. The minister added a NRI deposit scheme may be floated as there was an urgent need to stabilise the rupee.
“The government is actively considering significant liberalising of FDI policy that would further increase long-term foreign investment. We will ask some public sector companies to raise funds abroad,” the minister said.
He said the government hoped to contain gold imports at a level well below last year’s 845 tonnes.
The minister added: “Simultaneously we are looking at some compression in non-oil and non-gold imports, especially of non-essential goods.”
On fiscal deficit, Mr Chidambaram said: “The target for fiscal deficit is 4.8 per cent. It is a red line, and it will not be breached.”
On CAD, he added: “Thanks to the steps taken so far and some more steps on the anvil, we expect we would be able to fully finance the current account deficit this year too and will not be obliged to draw down on reserves.”
Asked if the government had any specific value of the rupee in mind, Mr Chidambaram said: “We don’t target any specific value, but we certainly do not countenance speculative transactions on the rupee, especially in the overseas market.”