'Nothing can stop India from becoming 3rd largest economy'
We don't have the space to do anything foolish or anything irrational, said the Finance Minister.
New Delhi: Finance Minister P Chidambaram answered questions about Budget 2013 using Google Hangout, a multi-person online video chat, on Monday. Chidambaram joined the camp of other personalities like Barack Obama to use Google Hangout to reach out to people.
9:00 pm We don't have the space to do anything foolish or anything irrational. We have to ensure everybody delivers the outcome he or she is expected to. Why should it take 5 years to build a 1000 km stretch of road, why should it take six years to build a power plant. Each one has to work forward for India to achieve its rightful place globally. (Check the transcipt here .)
8:58pm: FM thanks everybody for participating in the Budget analysis. There is nothing that can stop India from becoming the third largest economy in the world. We will be there along with US and China. We have everything to get there, but won't get there till we work hard and respect the laws of economics.
8:57pm: FM says younger generation much more informed and knowledgeable, sees great future for internet in India. We will need to strengthen broadband connectivity across the country. We may even see a virtual political party in India, with virtual members.
8:56 pm: How will internet impact the Indian economy, asks Amit Singhal of Google?
8:55 pm: FM says he has to look after the vast middle class, and just not the upper middle class. In metros, while costs are rising, so are incomes. But look at the farmer, income in rural parts not rising at the same rate as in metros. Same goes for those in casual jobs. We are not a country with only the middle class. We have to tax someone to raise revenues to meet broader objectives.
8:53pm: FM says millions of Indian still poor, some tax will have to be collected. If you are buying a mobile phone worth Rs 6000, there is nothing wrong being prepared to pay Rs 300 more. Same goes for eating out in air-conditioned joints.
8:52pm: Kudva asks why more tax on mobiles, eating out?
8:51 pm: Kala Kudva, homemaker asks how will the urban middle class maintain their standard of living given high inflation?
8:50 pm: FM clarifies that government borrowing this fiscal will only be Rs 10,000 crore more than last year. This is the smallest increase year-on-year.
8:49 pm: FM says that aware that debt market can be liberalised further by allowing more foreign money to come in; in fact that has been done to a large extent. RBI will not be in favour of completely opening the debt market, as that may have implications for the monetary policy. Things have to be done in a caliberated manner. Our foreign exchange reserves seemed large at one point of time. But given the current account deficit, the reserve does not look so large. We cannot allow Indian companies to borrow in dollars indiscrimately. How will they repay the dollar-denominated debts if they not exporting?
8:44 pm: FM says there are many imports that India cannot do without. But one import that India can do without, and that is gold. If we do not import gold for a year, current account will come down by half.
8:42 pm: Jahangir Aziz of JP Morgan says investors are most worried about India rupee despite current account surplus coming down in many Asian countries. He wants to know if there is any way to attract 'sticky' money flows.
8:40 pm: FM says there is scope for public private partnership in agriculture, but the public there has to be the state government, panchayat or co-operative society
8:39 pm: A farmer from Punjab wants to know from the FM if there are public private partnership arrangements for farming activities.
8:38 pm: FM says will be going on a global tour to places like Boston, New York, Toronto, West Asia, Middle East to persuade investors to investors here. But that is only a short term solution. What we need to do is grow our exports so that we can pay for our imports.
8:37 pm: FM says will not cross the red lines he has set for himself on fiscal deficit. Controlling current account deficit is a bigger problem, as you have to convince foreign investors to invest here.
8:36pm: Rishad Premji of Wipro wants to know the FM plans to rein in fiscal deficit and current account deficit
8:36 pm: FM says he did not face too many irrational suggestions this time. FM says there is no case for capital gains being exempt from tax. Sparing capital gains from tax is not the way to revive animal spirits.
8:35 pm Reader question: How difficult is to to eschew irrational political pressure while taking economic decisions?
8:32 pm: Our capital gains tax policy is quite fair.
8:30 pm: Growing exports is the only way out of the CAD problem, says FM. We have many economic zones, but companies have to come up and set up units in those zones. Companies are sitting on piles of cash
I will meet individual business houses to know their capex plans. We will do everything to boost manufacturing.
To ask PSUs for special dividend if capex aim is unmet and will monitor PSUs' capex every quarter.
8:23 pm: FM says we have not gone wrong anywhere. World economy has been in trouble since 2008, and we are part of it. We may have overdone the second and third part of the fiscal stimulus, that ended pushing up inflation.
FM says we have not gone terribly wrong. Growth this year may be low, but we can still climb out of it one rung at a time.
FM says each divestment has been a success from the time he has taken over
8:22 pm: Manish Chokhani of Axis Capital asks the FM how can the ease of doing business in India be improved. And while we have made good progress over the years, we seem to have lost our way somewhere. Why?
8:21 pm: FM says divestment is work in process, and the first divestment will happen in April. Confident of meeting divestment target of Rs 40,000 crore; has a definite game plan in mind.
8:20 pm: Mahindra asks FM if he could have been more specific about the divestment programme and how to improve retail participation in stock market.
8:18 pm: FM says no country in world is announcing anything Big Bang, given the problems everywhere. He says Big Bang makes for good copy, but there is nothing Big Bang happening anywhere
8:17 pm: Anand Mahindra wants to know if this is indeed a Big Bang Budget, and whether corporate India needs to decode it?
8:16 pm: Anand Mahindra answering FM's question earlier in the day why corporate India is shy of making investments.
8:15 pm: FM says should be able to get the women-dedicated bank going by November this year. FM says the women empowerment fund will be used in consultation with other ministries and NGOs
8:10 pm: Reechal Vardhan, IIM-Banglore student asks what are the specific programmes that the women empowerment fund will address?
8:05 pm: FM says have done a good job given the restricted economic space
8:00 pm: Google hangout session begins
P Chidambaram is joining the league of other personalities like Barack Obama to use Google Hangout to reach out to people.
Chidambaram is joined by a group of panelists including Anand Mahindra (chairman and managing director of Mahindra & Mahindra), Jahangir Aziz (senior Asia Economist and India Chief Economist, JP Morgan) among others. The session is moderated by CNBC-TV18's Senthil Chengalvarayan.
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