 "FM seeks to calm market jitters")
Later, the rupee crossed 66 a dollar in intra-day trade. It closed at 66.19 a dollar
“We have done our sum...we will still remain within the limit (for fiscal deficit) I have set for myself in the Budget papers,” Chidambaram said a press conference here. To a query on whether food security Bill passed by the Lok Sabha would derail the fiscal math, he said, “I have already said 4.8 per cent (of GDP) is a red line and the red line will not be breached.”
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For 2012-13, the government had brought down the country’s fiscal deficit to 4.9 per cent of gross domestic product from 5.7 per cent in the previous financial year.
The total food subsidy budgeted for this financial year is Rs 90,000 crore, of which Rs 10,000 crore is towards implementation of the food security Bill. The Bill would guarantee five kg of rice, wheat and coarse cereals a person a month at a fixed prices of Rs 3, Rs 2 and Rs 1 a kg, respectively.
The total burden of the Bill was pegged at Rs 1.25 lakh crore; after a few amendments, it was expected to rise to Rs 1.3 lakh crore. The amendments basically meant states such as Tamil Nadu, whose annual allocation of food grain would be cut by 1.2 million tonnes, would get extra grains, but at the existing Above-Poverty-Line rate of Rs 8.3 a kg for rice and Rs 6.1 a kg for wheat.
Finance ministry officials said this year, food subsidy would be reined in at the budgeted Rs 90,000 crore. The exact burden of the food subsidy would be visible from next year. The Bill gives states a year to implement the food security programme, from the time the law is enacted.
On Monday, Fitch Ratings had cautioned it might cut India’s rating to “junk” due to the country’s widening fiscal deficit. It doubted the government’s claims of reining in the fiscal deficit to 4.8 per cent of GDP.
Chidambaram said after passing the food Bill, the Lok Sabha would now take up the land acquisition Bill.