Passion and anguish in Chidambaram’s first Google Hangout

There was ‘passion and anguish’ in Finance Minister P. Chidambaram’s first Google Hangout – anguish over rising prices of daily essential commodities and passionate dream of India becoming the third largest economy. In the hour-long Hangout, he took questions from economists, businessmen, an IIM student, a home maker and others. [caption id=“attachment_648094” align=“alignleft” width=“380”] Finance Minister P Chidambaram during the Google Hangout.[/caption] In a bid to restart the growth engine, the finance minister said he will monitor, every quarter, the investment plans of public and private sector entities that are sitting on huge cash piles. “Each PSU is required to fill up that proforma, tell us what their capex targets are next year. We will monitor them closely beginning from April. Every quarter I will monitor what they are investing,” he said. In his meetings with the public sector executives earlier, Chidambaram had said that they would be asked to pay special dividend if they failed to execute investment plans. The whole exercise was aimed at re-starting the growth engine, the Minister said, adding that the economy will grow by over 6 percent in the next financial year and even higher in the subsequent years. “In the current year growth has slipped to five percent, but that doesn’t mean we cannot get into six percent or seven percent… I am confident we will get to six percent next year and seven percent in the year after. Potential is eight percent, we are aiming at nine percent,” he said. Justifying his budget, the finance minister said there was no economic space for doing more than what he has done in the Budget and promised that he can do more for economy in Apr-Sep if he gets more space. “We have got to play according to the pitch, weather,” he said. Replying to a question from Reechal Vardhan, a student from IIM-B, Chidambaram said the proposal for a women’s bank was the result of a lot of homework. He hopes to operationalise the bank in November with six branches in six regions. Replying to a question from industrialist Anand Mahindra, Chidambaram said no country is currently speaking of ‘a big bang’, not the US or the eurozone. The attempt is to stabilise economy like many other countries. He claimed each divestment plan a success since he took over as the finance minister and exuded confidence that the government will be able to raise Rs 40,000 crore through this route in 2013-14. He said the government will divest stake in 3 public sector units this month. He said the government did not go wrong any where on economy but said the fiscal stimulus in post-Lehman may have been overdone. He made a strong pitch for the taxing of capital gains from stock markets. “Why should capital gains from stock markets not be taxed?” he asked. Not taxing capital gains is not a way to revive investment, he said adding India’s capital gains tax regime is “a fair policy”. He reiterated that red lines have been drawn on fiscal deficit and promised not to cross them. Current account deficit is the most worrying deficit. The only way to bridge this gap is by improving the exports, he said. “There is a lot of hard work over the next 2 months.” The CAD would have been much worse but for remittances. In a spirited speech as the concluding remarks, he said nothing can stop India from becoming the third largest economy. “But we won’t get there unless we work hard and accept the laws of economics,” Chidambaram said. With inputs from PTI