Sinha sets deadline again to control inflation

As much as three percentage points of the eight per cent inflation rate currently witnessed was on account of primary food articles and once their prices stabilise, inflation would come down, he said.

Referring to the fiscal deficit, Sinha said India would be successful in containing it at the targeted 5.6 per cent of the gross domestic product GDP.

The minister, who is here to take part in the two-day conference organised by the World Bank on private investments in infrastructure in India, said he did not agree with the National Council for Applied Economic Research NCAER forecastof a higher fiscal deficit at 5.8 per cent.

quot;I am confident that it will be contained at 5.6 per cent,quot; he said. Elaborating on the rationale behind this, Sinha said the government was committed to keep a tight control on public expenditure and on no count would it be allowed to exceed the budgeted level.

Finance ministry had recently directed secretaries of various ministries in this regard, he said adding quot;we will not allow expenditure to run awayquot;.

On revenue mobilisation, he said direct tax collections had exceeded the targets though there was a shortfall in the indirect tax front. quot;However, the government was taking measures and I am confident we will end the year very close to the targets and shortfall, if any, would be minimal,8221; he said.

He also said government had not set any targets for the collection from the quot;samadhanquot; scheme meant to mop up taxes locked up in litigations. As much as Rs 52,000 crore of tax revenue was held up under 5.5 lakh cases of litigations and over Rs 30,000 crorecould be covered under the scheme. quot;We will be able to get some money under this litigation amelioration scheme,quot; he said.

The finance minister said government has initiated the process of disinvestment with the selling of shares of the Container Corporation of India. He said disinvestment of the three other public sector undertakings like Indian Oil Corporation, Videsh Sanchar Nigam Limited and Gas Authority of India Limited would also be taken up soon.

Government was also pursuing its decision to reduce its equity to 26 per cent in all non-defence related public sector companies.

Sinha expressed confidence that the government would be able to mop up the targeted sum of Rs 5000 crore from the disinvestment process during the current financial year.

The minister refused comment on the Reserve Bank8217;s decision not to cut cash reserve ratio or interest rates in its busy season credit policy and said quot;the RBI governor was closely watching the situationquot;. He, however, assured there would be no dearth offunds for lending.