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As the rupee once again crossed 65 mark against dollar, Finance Minister P Chidambaram cautioned against any panic reaction.
A day after Fitch Ratings expressed doubts over the Centre adhering to its fiscal deficit target of 4.8% of GDP for the current financial year, Chidambaram asserted that the projections will be met and expenditure on food security schemes has been factored into fiscal maths.
"Simply, we will have to be patient, be firm, do whatever is required to be done and the rupee will find its appropriate level," Chidambaram told a press conference here.
He reiterated that the rupee is undervalued and has overshot past its true value since Indian economy is challenged like other emerging market economies.
"So, India is also challenged and the impact is felt on both the equity and currency markets. What I said a few days ago, I still maintain it, rupee overshot its true value, it is undervalued. Others have confirmed it."
Yesterday, Fitch Ratings had doubted the government's ability to rein in fiscal deficit at 4.8% of GDP this year against 4.9% in 2012-13.
However, Chidambaram said,"I have already said that 4.8% is a red line and red line will not be breached."
TO a query whether food security bill, passed by the Lok Sabha, will not derail the fiscal math, the Finance Minister said he will remain within the fiscal limit that he has set for himself in the Budget.
"We have done our sum...we will still remain within the limit that I have set for myself in the Budget papers."
The total food subsidy budgeted in the current fiscal is Rs 90,000 crore, of which Rs 10,000 crore is towards implementation of the Food Security Bill. The bill will guarantee 5 kg of rice, wheat and coarse cereals per month per person at a fixed price of Rs 3, 2, 1, respectively.
Chidambaram said after passing the food bill, the Lok Sabha will now take up Land Acquisition Bill.
On the NSEL issue, he said that the government has appointed two panel, who have been asked to submit their report in 15 days. Chidambaram added that the government is in regular touch with the Sebi and FMC on the issue.
Chidambaram said the projects cleared by the CCI yesterday would help revive investment cycle in the economy.
The Cabinet Committee on Investments (CCI) yesterday cleared projects, mainly related to power, involving investments of about Rs 1,82,000 crore. These include stage 1 clearance to Reliance Power promoted Sasan project. Besides Sasan, approvals were given to 18 power projects involving investments of Rs 83,772 crore. Of these Rs 30,313 crore has already been disbursed, Chidambaram said.
Fuel supply agreements on these power projects are slated to be signed by August 31. However, there could be minor slippages and the agreements will be signed by 6 September.
Besides nine projects involving investments of Rs 14,084 crore were also cleared by CCI. Another nine projects which will draw investments of Rs 85,141 crore were also taken up by CCI. Seven of them wete given different timeframes.
On Sasan project, developer will be asked to deposit money and then stage two clearance will be given.
