Budget 2013: Chidambaram announces inflation-indexed bonds

NEW DELHI: Finance Minister P Chidambaram in his budget 2013 speech announced the intention to introduce inflation-indexed bonds or certificates. "In consultation with RBI, I propose to introduce inflation indexed bonds or certificates," he said.

The details of these financial instruments will be announced later. Chidambaram announced the measure to shift away ever increasing demand for gold in the country to other financial instruments.

With an intention to reduce gold imports, Chidambaram also announced a liberalised Rajiv Gandhi Equity Savings Scheme (RGESS). "RGESS will be liberalised & the investor will be allowed to invest in mutual funds," he said.

"The investor will be able to do this for a period of 3 successive years. The limit for investors wanting to invest in RGESS has been raised from Rs 10 lakh to Rs 12 lakh," he added.

In a move that will bring cheer to many prospective home-owners, Chidambaram announced incentives for home loan borrowers in his budget 2013 speech.

Chidambaram said that any person taking a first time home loan up to Rs 25 lakh during the financial year 2013-14 will be allowed an additional tax deduction of interest of up to Rs 1 lakh.