Finance Minister P Chidambaram, on his two-day visit to Mumbai met with a host of capital market participants -- FIIs, brokers, bankers, industrialists -- to put their doubts about the new government's commitment to economic reforms.
The finance minister tried to allay the fears in the minds of the market participants and also gave some indications towards presenting a good budget, which he said will be done in the first week of July.
Here is a sample of 'PC-speak' during a meeting he had with a select group of brokers in Mumbai on Wednesday evening:
- "I will put my best foot forward in the next few weeks and months."
- "Wait for a month, we will take many initiatives and expect a few 'sexy' things in the Budget."
- "Whereas we have as many 35 million income tax payees there are only 80,000 entities that pay excise duty. Such items usually appear 'non-sexy,' but can make the budget exercise completely different."
- "Keep faith in India and India's economy. Keep faith in the ship's captain and other sailors that steer this ship."
- "The Common Minimum Programme is a political document that recognises the concerns of several parties led by Congress in this coalition. It is a document that will be implemented over a period of five years."
- "There is no economics without good politics and vice versa."
- "We have an abiding commitment to reforms. We recognise that the economy is in a resilient/ growth mode and this year will also be one of growth."
- "We clearly recognise that it is only reforms (across many sectors and at all levels) that can put India on the high growth track."
- "The resources that would get generated through growth over the next couple of years by being fiscally prudent and financially disciplined would look after the other areas that the new government wants to bring under its reform process."
- "The Congress and the Untied Progressive Alliance are keen to undertake new areas of reforms and initiatives such as friendly, simple administration of indirect taxes and one that improves efficiency."
- "There are two overarching objectives before me: One, to keep India on a high growth path (and his estimate is a 7-8 per cent GDP growth), and two, to do so by observing fiscal prudence and financial discipline."
- "I am bound to wipe out the revenue deficit by 2008-09. We would follow the Kelkar committee report as a roadmap."
- "Remove the delusion from your minds that we will divert funds to non-productive use at all."
- "There is no directed lending to agriculture by banks. We do not wish to interfere in pricing and risk adjustment exercise of banks for agri-lending too and thus your concern on possible increase in non-performing assets is not correct. There are 100 million farming families of which only 40 million receive credit as institutional lending. So banks could look at this sector as a commercial opportunity for themselves."
- "The downstream benefits of raising the literacy levels are huge. This would increase the number of skilled and semi-skilled persons which would naturally bring more jobs to more people. It would also increase the level of responsibilities amongst people. This year 60 per cent of the new voters do not have jobs."
- "We intend to continue to attract foreign institutional investors into our markets. We need to see whether the brakes that we had placed 13 years ago should still be in place or not."
- "The capital market is the key to an open and competitive market place. It is the place from where capital must be raised. The government cannot provide money for everything."
- "VAT (Value-Added Tax) will be introduced and we will set the date."
- "I intend to form a special committee, in the next few days, that will keep me advised on the capital market."