Document Fragment View

Matching Fragments

 
STATE OF THE ECONOMY The Twin Deficits and Inflation           Let me begin with the good news.  The fiscal deficit for 2013-14 will be contained at 4.6 percent of GDP, well below the red line that I had drawn last year.   More importantly, the Current Account Deficit, that threatened to exceed last year’s CAD of USD 88 billion, will be contained at USD 45 billion, and I am happy to inform the House that we expect to add about USD 15 billion to the foreign exchange reserves by the end of the financial year.  Analysts and rating agencies had acknowledged our efforts some months ago and no longer speak about a downgrade.  I hope that domestic experts will now agree that the UPA Government meant what it said when it put fiscal stability at the top of the agenda. Going forward, I appeal to all political parties to join me in the pledge that we shall not – we shall never – do anything that will affect the stability of the foundations of India’s economy.

          I can confidently assert that the economy is more stable today than what it was two years ago. The fiscal deficit is declining, the current account deficit has been contained, inflation has moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased, and hundreds of projects have been unblocked. 

          Madam Speaker, all this is the result of hard work.  I may add, among other mentors, my mother and Harvard taught me the value of hard work.

          The UPA Government has a clear line of sight to the goals that we have set for ourselves.  I have broken down the steps toward those goals into tasks that must be undertaken by the Government of the day.  I crave your leave to identify ten such tasks:
i.      Fiscal Consolidation: We must achieve the target of fiscal deficit of 3 percent of GDP by 2016-17, and remain below that level always.
ii.      Current Account Deficit: Since we will run a Current Account Deficit every year for some more years, it can be financed only by foreign investment, whether it is FDI or FII or ECB or any other kind of foreign inflow. Hence, there is no room for any aversion to foreign investment.