Let’s live within our means: PC
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Setting the stage for a difficult cost cutting at the Centre, Union finance minister P. Chidambaram on Wednesday said that the debt of a country must be sustainable and should be within the limits.
“No country can live beyond its means,” Chidambaram said in his address to the fourth meeting of the Consultative Committee attached to his ministry on Tuesday.
In an apparent reference to the highly leveraged European countries, the finance minister said that the countries which have accumulated unsustainable level of debt are facing economic and financial problems.
He said that the best efforts would be made to contain fiscal deficit at 5.3 per cent. He noted that though the target of 5.3 per cent is a challenging one, it can be done.The strategy to achieve the target would be to maximise revenue collections and control expenditure.
He said that serious efforts would also be made to bridge the gap in the current account deficit (CAD) or the difference between receipts and payment obligations of the country in foreign currency. The CAD presently stood at $70.3 billion. The minister mentioned that capital inflows through FDI and FIIs are vital in meeting the CAD.
Emphasising the need to attract stable foreign investment in form of FDI compared to volatile foreign portfolio investments in stock exchanges, the finance minister that the FDI is not an option, but an imperative, failing which “we will have to rely on borrowings to meet the CAD.”
He also sought the support of members of all the political parties in strengthening the government’s efforts to contain both the fiscal deficit and current account deficit.
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