Chidambaram paints rosy picture

Painting a sound picture of the Indian economy, Finance Minister P Chidambaram's presentation to the UPA coordination committee noted that some progress had been made in agriculture.

Public investment in the sector was Rs 12,591 crore in 2004-05, the highest since 1999-2000, the minister said, adding that the share of public sector in gross investments increased by over 11 percentage points to reach 29.2 per cent in 2004-05.

In addition, credit flows to agriculture grew to Rs 157,486 crore in 2005-06, a growth of over 25 per cent over the previous year.

However, Chidambaram pointed out that finding adequate resources continued to be a challenge for agriculture. Accordingly, he pitched for reform of the agricultural price support system with an eye on encouraging diversification. As an example, he cited stagnant output of pulses (13-14 MMT) lagging behind demand.

The detailed presentation also dwells on other issues including a strong pitch for banking, insurance and pension reforms.

Chidambaram added that while the fiscal challenge remained, efforts to enhance tax collections were showing buoyant revenues.

The Tax-GDP ratio of budget estimate is 11.2 per cent for the current fiscal. A year-on-year growth of 20.8 per cent in tax revenues is estimated at Rs 4,41,250 crore for the current fiscal.

On the road ahead, Chidambaram said that 16 states with similar schemes on the lines of the newly defined contribution pension scheme for new central government employees were awaiting the centre's guidance.

However, the presentation does not contain any reference to the markets.