FM optimistic about state of fisc

MID-YEAR REVIEW OF THE ECONOMY

Finance Minister P Chidambaram today said he was "optimistic and positive" about the prospects of the economy for the current fiscal.

He, however, admitted there were slippages in excise collection in the wake of measures undertaken by the government to contain the impact of high international crude oil prices.

Speaking to reporters after the mid-year review was tabled in Parliament, Chidambaram said income tax, corporation tax and Customs duty collections were on target, but excise duty collections were "slightly behind" because of the duty cuts undertaken twice to contain petroleum product prices in the face of surging global crude oil prices.

He pointed out that excise duty collections for non-petroleum products were reasonably good, and that the shortfall would be made up in the remaining three months of the current fiscal.

He asked farmers, industrialists and service providers not to be complacent and work hard to achieve results and move forward as the next year was expected to be a better one.

"I think if all players play their part, the year will end on a very substantial and positive note," he asserted. Chidambaram pointed out that the review said most of the shortfall in the kharif crop would be made up by the rabi crop and, therefore, the feared setback in agriculture might not happen.

He said exports had recorded a booming growth of 25 per cent, infrastructure was doing well with lot of investments taking place, credit offtake was good, stock market sentiment was good with the Bombay Stock Exchange Sensex had surged to the over 6,300 mark and foreign exchange reserves had grown to $130 billion.

In fact, the mid-year review had projected an impressive growth for the first half of the current fiscal and looking at the October-November figure the prospects were even better, the minister said.

As far as industry was concerned, the figures for industrial output for April-October 2004 showed 8.4 per cent growth as against 6.2 per cent in the same period in the previous fiscal, he said, adding that in November industrial production was expected to be "even better".

Chidambaram said the manufacturing sector had recorded 8.8 per cent growth in the first half of this fiscal as against 6.8 per cent in the corresponding period of the previous year.

Similarly, electricity had recorded a growth of 7.1 per cent during April-September this year as against 2.9 per cent in the previous year, while mining grew at 5 per cent as against 3.9 per cent last year, he said.