Liquidity to be tight, says FM

Unperturbed by the 217-point fall in the Sensex, Finance Minister P Chidambaram today said it was nothing but a 8220;correction.8221; 8220;It8217;s a correction. It8217;s nothing,8221; he told reporters. While dismissing any cause for worry in the capital market, Chidambaram expects huge advance tax payments by corporates in the coming days and a liquidity crunch in the banking system.

8220;Liquidity will be tight as there will be a huge amount of advance tax payments by corporates in March,8221; he said, adding that government had privately placed bonds worth Rs 10,000 crore with the RBI on Monday. The FM said states should spend more as they have cash surpluses.