Budget 2013: P Chidambaram satisfied with the budget, hopes RBI will take the cue, cut rates

NEW DELHI: Declaring the maths underpinning his Budget numbers to be beyond reproach and noting that he had delivered on his fiscal promises, Finance Minister P Chidambaram has made a strong yet subtle pitch to the monetary authorities to now do their bit to revive growth.

In an exclusive interview with ET NOW on Friday, Chidambaram said the government had stuck to its promise of containing fiscal deficit at 5.2 per cent of GDP this year, and expressed confidence it would be restricted to 4.8 per cent in the next fiscal. “I am sure that the ( RBI) governor has taken note of all that I have said in the Budget speech… I am sure all this will weigh with the monetary policy advisory committee… and the governor will take the right decisions,” he said in the interview, his first since presenting the Budget on Thursday.

Asked if he was pitching for a rate cut, the minister said: “I will answer it this way — reduction in interest rates will certainly help get us to 6.5 per cent ( GDP growth).”
Read Full Interview

The Budget received mixed reviews, with some calling the numbers a tad too optimistic. Markets especially were spooked by fears that the fine print in the Finance Bill implied capital gains tax on investors coming through Mauritius and other countries with which India has a Double Taxation Avoidance Agreement.

However, these fears were later clarified to be unnecessary. Chidambaram acknowledged the fears triggered by the fine print, noting it was “clumsily worded”.

“It was rather clumsily worded. They just lifted last year’s paragraph from the memorandum to the finance bill and put it in the section,” he said, adding TRC was “conclusive evidence” of a person’s resident status.