Press Information Bureau

Government of India

Ministry of Finance

27-December-2012 16:41 IST

The Union Finance Minister Shri P. Chidambaram has expressed optimism that the Indian economy will continue to grow at a healthy rate even as the global economies face recession. This, he said, is because our economy has strong fundamentals and factors such as high savings rate, growing services sector, a large middle class which continues to create demand and technical and qualified manpower and the youth. The Finance Minister was speaking at the National Development Council meeting in New Delhi, today.

The Finance Minister said that it was imperative to contain the fiscal deficit by augmenting resources and controlling expenditure. He said that some measures may cause immediate pain but this was necessary to ensure that the fiscal deficit came down to 3 per cent in the next three years. Steps were also being taken to contain the Current Account Deficit (CAD). He said that there was need to control gold imports which contributed US $ 64 billion to the CAD. Shri Chidambaram lauded the States for containing the fiscal deficit to 2.1 per cent of the GDP and also for generating revenue surplus of 0.75 per cent.

He urged all States to adopt the Direct Benefit Transfer scheme as it provided a technology enabled platform to transfer benefits in an efficient manner directly to the people. He said that in the initial phase subsidies relating to petroleum, food and fertilizer would not be distributed through this scheme and only those schemes which are amenable will be taken up. The Direct Benefit Transfer will be a game changer and it will be a transform the way in which subsidies are managed and will be past breaking for governance, said the Minister.

* * *

DSM/RS/bs

Fiscal consolidation urged to reduce deficits; resource augmentation and expenditure control alongside Direct Benefit Transfer adoption. Fiscal consolidation is the central policy objective: contain the fiscal deficit by augmenting resources and controlling expenditure while containing the Current Account Deficit through measures such as restraining gold imports. States are commended for lower fiscal deficits and a revenue surplus. Concurrently, adoption of the Direct Benefit Transfer platform is urged to improve subsidy delivery and targeting; initial phases will exclude petroleum, food and fertilizer subsidies and focus on schemes amenable to direct transfers.