09-30-2006, 01:56 AM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Chidambaram signals galloping inflation </b>
Pioneer News Service | New Delhi
The Indian economy may have registered an-all time high quarterly growth of 8.9 per cent growth during the current financial year, but spiralling fiscal deficit could mar the celebration.
<b>The mismatch in growth and price rise and supply and demand are also other areas of serious concern, </b>which saw Finance Minister P Chidambaram making a desperate plea to the UPA allies on Friday to give "political space" to financial sector reforms for sustenance of growth.
Hidden under the rosy GDP figures, is also a grim reminder that agriculture growth has remained flat at 3.4 per cent.
<b>With farm sector going through a grave crisis and prices of agricultural produce skyrocketing, the stagnation in agriculture could be a source of grave worry for the UPA Government</b>.
Even though Chidambaram is confident that economy is heading in the right direction and backed his claim by the GDP growth figure, <b>he admitted that deficit crossed 60 per cent of budgetary targets during the first five months of the current fiscal. Fiscal deficit touched Rs 90,678 crore during April-August, 2006, which accounted for 60.98 per cent of the budgetary target of Rs 1,48,686 crore for the whole year, he told reporters here.</b>
<b>Revenue deficit stood at Rs 79,348 crore, which was 93.71 per cent of the target of Rs 84,727 crore for entire 2006-07, he said. "There are some concerns about the fiscal deficit figures and revenue deficit figures... I am confident, given the buoyancy in tax revenue, targets for fiscal deficit and revenue deficit will be met for the current fiscal,"</b> Chidambaram said.
However reports indicate that the <b>finance minister was worried about the intense lobbying by different ministries for greater allocation for fund for the XIth plan and feared that for government might not be able to bring down the fiscal and revenue deficits as planned.</b> Officials feel that rise in revenue mobilisation, may not meet the pressure for massive spending on social-sector programmes.
Chidambaram's admission that fiscal deficit in the first five months crossed 60 per cent of budgetary target of the entire year, is a sure indication that if the same trend continued then he would not be able to meet the target of reducing fiscal deficit from 2.6 of GDP last year to 2.1 this year. The inability control the fiscal deficit is bound to derail the Government's plan to curb inflation.<b> The overall impact could further worsen the price scenario.</b>
The reality of the situation must have weighted on the mind of the finance minister when he asked the UPA allies and the Left to remove road blocks in the path of reform.
"In a coalition it is very important that the political space is given to the government to undertake further economic reforms. There are many matters which are pending or are in pipeline. I wish and hope that we are given the political space to push through reforms," he told a press conference marking completion of almost half the term of the UPA government that came to power in May 2004.
Chidambaram's appeal assumes importance in the wake of differences within the UPA, especially the Left's opposition to crucial financial sector reform proposals.
<b>"Financial sector is the heart of the economy and unless financial sector reforms are completed it will be difficult to sustain high growth,"</b> he cautioned.
"Given the performance of the last two and half years of the economy, I wish everyone will cooperate in giving the government political space to implement further economic reforms that are contemplated in NCMP, budget speeches and various pronouncements," he said.
In particular it was very important that the government passed pending legislations in banking and pension sector reforms as also the bill on insurance, he said.
<!--QuoteEnd--><!--QuoteEEnd-->
Farmers suicide are over blown so why agriculture production is stagnant <!--emo&:devil--><img src='style_emoticons/<#EMO_DIR#>/devilsmiley.gif' border='0' style='vertical-align:middle' alt='devilsmiley.gif' /><!--endemo-->
FM is doing nothing to control inflation, if looking towards left or blaming only Left not his own ability to fix problem is a solution, so dooms day is not far.
With this deficit, let's see how much they will spend on education sector to accommodate OBC reservation and Muslim appeasement.
<!--emo&:argue--><img src='style_emoticons/<#EMO_DIR#>/argue.gif' border='0' style='vertical-align:middle' alt='argue.gif' /><!--endemo-->
Pioneer News Service | New Delhi
The Indian economy may have registered an-all time high quarterly growth of 8.9 per cent growth during the current financial year, but spiralling fiscal deficit could mar the celebration.
<b>The mismatch in growth and price rise and supply and demand are also other areas of serious concern, </b>which saw Finance Minister P Chidambaram making a desperate plea to the UPA allies on Friday to give "political space" to financial sector reforms for sustenance of growth.
Hidden under the rosy GDP figures, is also a grim reminder that agriculture growth has remained flat at 3.4 per cent.
<b>With farm sector going through a grave crisis and prices of agricultural produce skyrocketing, the stagnation in agriculture could be a source of grave worry for the UPA Government</b>.
Even though Chidambaram is confident that economy is heading in the right direction and backed his claim by the GDP growth figure, <b>he admitted that deficit crossed 60 per cent of budgetary targets during the first five months of the current fiscal. Fiscal deficit touched Rs 90,678 crore during April-August, 2006, which accounted for 60.98 per cent of the budgetary target of Rs 1,48,686 crore for the whole year, he told reporters here.</b>
<b>Revenue deficit stood at Rs 79,348 crore, which was 93.71 per cent of the target of Rs 84,727 crore for entire 2006-07, he said. "There are some concerns about the fiscal deficit figures and revenue deficit figures... I am confident, given the buoyancy in tax revenue, targets for fiscal deficit and revenue deficit will be met for the current fiscal,"</b> Chidambaram said.
However reports indicate that the <b>finance minister was worried about the intense lobbying by different ministries for greater allocation for fund for the XIth plan and feared that for government might not be able to bring down the fiscal and revenue deficits as planned.</b> Officials feel that rise in revenue mobilisation, may not meet the pressure for massive spending on social-sector programmes.
Chidambaram's admission that fiscal deficit in the first five months crossed 60 per cent of budgetary target of the entire year, is a sure indication that if the same trend continued then he would not be able to meet the target of reducing fiscal deficit from 2.6 of GDP last year to 2.1 this year. The inability control the fiscal deficit is bound to derail the Government's plan to curb inflation.<b> The overall impact could further worsen the price scenario.</b>
The reality of the situation must have weighted on the mind of the finance minister when he asked the UPA allies and the Left to remove road blocks in the path of reform.
"In a coalition it is very important that the political space is given to the government to undertake further economic reforms. There are many matters which are pending or are in pipeline. I wish and hope that we are given the political space to push through reforms," he told a press conference marking completion of almost half the term of the UPA government that came to power in May 2004.
Chidambaram's appeal assumes importance in the wake of differences within the UPA, especially the Left's opposition to crucial financial sector reform proposals.
<b>"Financial sector is the heart of the economy and unless financial sector reforms are completed it will be difficult to sustain high growth,"</b> he cautioned.
"Given the performance of the last two and half years of the economy, I wish everyone will cooperate in giving the government political space to implement further economic reforms that are contemplated in NCMP, budget speeches and various pronouncements," he said.
In particular it was very important that the government passed pending legislations in banking and pension sector reforms as also the bill on insurance, he said.
<!--QuoteEnd--><!--QuoteEEnd-->
Farmers suicide are over blown so why agriculture production is stagnant <!--emo&:devil--><img src='style_emoticons/<#EMO_DIR#>/devilsmiley.gif' border='0' style='vertical-align:middle' alt='devilsmiley.gif' /><!--endemo-->
FM is doing nothing to control inflation, if looking towards left or blaming only Left not his own ability to fix problem is a solution, so dooms day is not far.
With this deficit, let's see how much they will spend on education sector to accommodate OBC reservation and Muslim appeasement.
<!--emo&:argue--><img src='style_emoticons/<#EMO_DIR#>/argue.gif' border='0' style='vertical-align:middle' alt='argue.gif' /><!--endemo-->