The statement assumes significance as slashing of the current account deficit to 3.7 per cent of GDP this fiscal from the record 4.8 per cent last fiscal being is now a red line for the government and financing even the reduced deficit could face problems amid dwindling capital flows.
However, the minister ruled out the raising of petrol and diesel prices in haste. Concluding a discussion on the first batch of supplementary demand of grants for 2013-14 in the Rajya Sabha, he called the high consumer price inflation as one of the factors behind the economy being stressed.
In the context of the controversy surrounding the finance minister’s earlier remarks blaming policies followed under his predecessor Pranab Mukherjee for fiscal expansion, Chidambaram clarified that the decisions taken during 2008-09 were necessary in the wake of the economic situation prevailing then.
“We have to take hard decisions to curb import of non-essential items. Measures would be announced in a few weeks,” he said.