Economy more stable today; new bank licences in a few weeks

Economy more stable today; new bank licences in a few weeks
Seeking to paint a rosy picture, Finance Minister P Chidambaram today said the fiscal and current account deficits are under control and the economy is more stable than it was 18 months ago.

"The economy certainly is more stable today than what it was 18 months ago. That is reflected in the strengthening of the rupee, that is reflected in heightened interest of investors, both FDI and FII," he told reporters after addressing the board of the Reserve Bank of India.

Chidambaram, who had taken over as Finance Minister 18 months ago in August 2012, said the fiscal deficit target for 2013-14 will be met and the current account deficit (CAD) will be contained below USD 40 billion.

"I am glad that the measures taken by the RBI and measures taken by the government are complementing each other and have delivered substantially the goal of stability that we had set for ourselves 18 months ago," he added.

To a question about the issuance of new bank licences, RBI Governor Raghuram Rajan said the central bank would take a decision in the next few weeks, subject to approval of the Election Commission.

"My sense is if all goes well, we should be able to do it (issue new licences) in a few weeks," Rajan said, adding that the RBI would approach the Election Commission to ensure there is no violation of the model code of conduct.

The code came into force on March 5, when the Lok Sabha poll schedule was announced. Talking about the economy, Chidambaram said India must achieve "price stability and growth, that is what the people of the country of want and that is what the people of the country deserve."

He expressed confidence that by "working together" the government and RBI would be able to achieve these targets. To a query on easing of curbs on gold imports, the Finance Minister said the government would revisit the matter after the final CAD numbers are out.


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