News Hour - Chidambaram seeks to assure investors, says policies will be modified

NEW DELHI: Expressing confidence that inflation can be tamed in the medium term, Finance Minister P Chidamabaram on Monday said that the government will work with the RBI to ensure moderation of prices. 

Stating that the fiscal and monetry policies must move in tandem, Chidambaram said that a new path for fiscal consolidation will be unveiled. 

Citing the need to regain confidence of all stakeholders, Chidambaram said that the government will modify policies to regain investor confidence. Chidambaram also said clarity and stability in tax laws would provide confidence to investors. 

Chidambaram was of the opinion that the economy is challenged by many factors and that high interest rates are a burden on consumers. The Finance Minister went on to say that steps will be taken in a few weeks to attract investments in mutual funds and insurance. 

In March, the government had budgeted a fiscal deficitof Rs 5.14 trillion or 5.1 per cent of the gross domestic product (GDP) for the current fiscal year. 

Fiscal deficit during the April-June period rose to Rs 1.9 trillion ($34.08 billion), or 37.1 per cent of the full fiscal year 2012/13, government data showed in July.