Millennium Post

FM pledges more reforms to boost falling investment

Seeking to accelerate reforms to spur investments, Finance Minister P Chidambaram on Thursday said that the government will announce host of decisions, including relaxation of FDI caps and resolution of gas and coal prices, in the next few days.
He further said there was no need for panic over declining value of rupee and the domestic currency would regain the losses suffered in last few days and stabilise.

'I am looking forward to more reforms... I expect a number of decision in the next few days and weeks... In June, you can expect number of decisions taken and implemented that will accelerate reforms and spur investments in critical sectors,' Chidambaram said.
He said the decision will be taken on coal and gas pricing, coal allocation to power plants, FDI limit in various sectors, including defence, and skill development.

The Minister was addressing media in the backdrop of steep decline in rupee which on Tuesday touched life-time low of 58.96 intra-day against the US dollar.Terming suggestions of a panel on simplifying foreign investment norms as positive,he said market regulator Sebi will take decision on the report at its next Board meet on 25 June.

‘We are in favour of K M Chandrasekhar Committee report.Recommendations are positive and deserved to be accepted,’ he said while addressing a press conference here.Expressing satisfaction over declining gold imports, Chidambaram appealed to the people to 'resist the temptation to buy gold' saying it will dramatically change the CAD position.

Chidambaram, however, ruled out any immediate hike in gold import duty saying he doesnt want to be 'too unpopular'.

'Net gold imports, averaged $135 million a day, in first 13 business day in May till 20 May. However, in the subsequent 14 business days, it averaged only $36 million, so gold imports have sharply come down. But I would be happy if they come down even further,' he said.
Huge gold imports have put pressure on the country's Current Account Deficit (CAD), which in turn is affecting the value of rupee.
The government has hiked import duty to 8 per cent recently to curb gold demand. The Reserve Bank has put restrictions on banks on importing gold.

Pointing out that there are other financial instruments which provide better returns than gold, Chidambaram urged people not to invest in gold.
'Suppose people of India don't import gold for one year, the whole situation will dramatically change. If we can have it for six months, one year, it will dramatically change the situation of CAD. And we will see its positive impact on every other index that measures the economy-- stock market, exchange rates, interest rates,' Chidambaram said.
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