Ready for fiscal steps to check inflation: FM

Optimistic of 7-7.5% economic growth in 2005-06, finance minister P Chidambaram today said the government will not hesitate to take fiscal
measures to check inflation while keeping deficit on leash.

"RBI has projected 7-7.5% growth for the current year. We agree with the assessment, and are optimistic of improving our growth performance over that of the previous year (6.9%)," Chidambaram told the annual economic editors conference today.

Giving credit to RBI for prudent monetary management to keep inflation below 5% despite the surge in global crude oil prices, he said "the government will not hesitate to take any fiscal measures."

Regarding government finances, Chidambaram said indicators show that states have reduced deficits substantially, and the government has decided to carry forward fiscal reforms for halving revenue deficit to 0.7% of GDP in 2005-06 and cut fiscal deficit to 3.1%.

On tax reforms, he asked non-VAT states to "come on board" and switch over to the tax regime by January 2006 so that the government could start consultations with states for the next major reform measure of  moving over to a nationwide goods and services tax (GST) that will require amendment to the constitution as well.