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Budget '07-'08: PC's post-Budget interview

Chidambaram explains the finer nuances of the Union Budget 2007-08.

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• Budget '07-'08: PC's post-Budget interview

Keywords: Union Budget 2008, specials

Chidambaram: So far approved. The cabinet has approved two and many more are coming. We hope to do about six to eight in a financial year.

Raghav: And the amount would therefore go out proportionately, could it be Rs 6000-7000 crore?

Chidambaram: I cant say which company is approved but going by some rule of thumb, I am not going to do disinvestments where I am getting Rs 50 or 100 crore. Therefore, if we do between six and eight companies; non-navaratna small portion monetised we should be able to garner about Rs 6000-7000 crore and put it away in a fund.

Raghav: So therefore the disinvestments target could be Rs 6000-7000 crore?

Chidambaram: It is not a target but just an effort.

Raghav: April 1, 2010 seems to be the big date?

Chidambaram: Is that not a major reform.

Raghav: It is but are you saying that we are likely to be zero-deficit country by then.

Chidambaram: Yes, I think so.

Raghav: Are you also saying we will have a GST (goods and service tax) at level of 12?

Chidambaram: Just remember that between today and April 1, 2010 there is an election and this question should be asked to the FM of the day. I think the number will be somewhere between 14 and 16. Industry has recommended the number should be between 14 and 16 but what that number would be you must ask the FM of the day.

Raghav: Mr Kelkar in his report spoke about 12%, do you think that is too aggressive for India?

Chidambaram: From our revenue requirement point of view unless there is tremendous widening of the tax base, 12% may be too low a rate for us to give the revenues required for our expenditure.

Raghav: Why did you not cut central sales tax to 2%; why have you postponed it for later in the year?

Chidambaram: That is because we have not reached the agreement yet. They have told me that they are going to make every effort to reach agreement by March 31. It only requires a notification.

Raghav: By when do you think you will be able to do that?

Chidambaram: I have given proposals to the empowered committee. The ball is in their court now. So I don’t know, maybe this month or maybe early April.

Raghav: So it’s not too far away in the future?