Finance Minister P Chidambaram, who is on a visit to Canada to woo foreign investors, said that the government was committed to bring down the fiscal deficit and wanted to reduce it by 0.6 per cent every year till it came down to 3 per cent by 2016-17. Fiscal deficit is estimated to be around 5.3 percent of the GDP for the FY13.
Elaborating the reasons for high fiscal deficit, Chidambaram said that the stimulus measures taken after the 2008 global economic crisis had driven fiscal deficit and inflation out of control. He further added that the first stimulus package was necessary, however the second and the third stimulus package were probably not required and that the country is now on path of fiscal consolidation.
Finance Minister has projected India as an attractive investment destination with stable fiscal regime and invited Canadian investments in sectors like infrastructure and food processing. Further, he said that India sees no difficulty in concluding a free trade pact with Canada. Referring to bilateral trade and investment between the countries, he said that while imports and exports were roughly matched in both directions with total trade approaching over $5 billion in 2012 as against $4 billion in 2010, the same was not true for bilateral direct investment. On the Foreign Investment Protection and Promotion Agreement (FIPPA), Chidambaram said there are certain legal issues which are being sorted out by the Government.
