P. Chidambaram in Greater Noida on Wednesday. (PTI)
New Delhi, Jan. 15: Finance minister P. Chidambaram today expressed confidence that the economy would be back on the high growth path in the next three years and the government would contain fiscal deficit to 4.8 per cent of the gross domestic product in the current fiscal.
“It is true that there has been a slowdown in 2012-13 and in the current year. The slowdown reflects the world-wide trend. As global economy recovers and as new measures take effect, I am confident that the Indian economy will also get back step by step to the high growth path in three years,” he said at a Petrotech conference.
Economic growth slipped to a decade low of 5 per cent in 2012-13 and in the current fiscal it is estimated to be around the same level. It grew over nine per cent before it was hit by the global crisis of 2008.
Chidambaram expressed hope that the revised growth estimates for 2012-13 were likely to be better than the earlier projections.
The government is scheduled to come out with the revised growth estimates for 2012-13 on January 31 and the advance estimates for the current fiscal on February 7.
Hinting at possible cuts in government spending, Chidambaram said the fiscal deficit would be contained at 4.8 per cent of GDP in the current fiscal.
His “unflinching commitment” to contain the fiscal deficit comes at a time the deficit in the first eight months has touched 93.9 per cent of the full-year target.
The government is witnessing a fall in tax collections and lower receipts from share sale in state-run companies on account of the worst economic slowdown in a decade.
The current account deficit (CAD), the difference between inflow and outflow of foreign exchange, will be contained at $50 billion in the current fiscal, Chidambaram said.
CAD soared to the all-time high of $88.2 billion, or 4.8 per cent of GDP, in 2012-13. The government had taken several measures, including curbs on gold imports, to contain CAD.
With regard to the oil import bill, the finance minister said of the total imports of $491 billion in 2012-13, oil imports accounted for $164 billion.
IOC stake sale
The empowered group of ministers headed by Chidambaram will meet tomorrow to decide on the government’s 10 per cent stake sale in Indian Oil Corporation. The stake sale is likely to fetch the government Rs 4,800 crore.
The ministerial panel could consider the option of Oil India buying 7 per cent in IOC and ONGC the remaining 3 per cent, the official said.