"The economy certainly is more stable today than what it was 18 months ago. That is reflected in the strengthening of the rupee, that is reflected in heightened interest of investors, both FDI and FII," he told reporters after addressing the Reserve Bank of India (RBI) Board.
    
Chidambaram said the fiscal deficit target for 2013-14 will be met and the current account deficit will be contained below USD 40 billion.
    
"I am glad that the measures taken by the RBI and measures taken by the government are complementing each other and have delivered substantially the goal of stability that we had set for ourselves 18 months ago," he added.

New bank licences likely in next few weeks: Rajan     

To a question about the issuance of new bank licences, RBI Governor Raghuram Rajan said the Central Bank would take a decision in the next few weeks, subject to approval of the Election Commission.
    
"My sense is if all goes well, we should be able to do it (issue new licences) in a few weeks," Rajan said, adding that the RBI would approach the Election Commission to ensure there is no violation of the Model Code of Conduct.

The Model Code of Conduct came into force on March 5, when the schedule for Lok Sabha polls was announced.
Chidambaram said he made no recommendations to the RBI regarding the bank licences.

"We had appointed Jalan Committee. The Jalan Committee report is before the RBI. I have not seen Jalan Committee report. The

RBI will take appropriate decisions. If at some stage the Governor wishes to share its contents with me, then I would be very happy to listen. But I don't intend to speak," he said.

Economic stability must include price stability, growth: Chidambaram

The goal of economic stability must include price stability and growth and the government has the right to set the inflation target, Chidambaram said.

The Finance Minister said India must achieve ‘price stability and growth, that is what the people of the country want and that is what the people of the country deserve’.
    
He expressed confidence that the government and RBI would be able to achieve these targets by ‘working together’.
    
To a query on easing of curbs on gold imports, the Finance Minister said the government would revisit the matter after the final CAD numbers are out.

Referring to his meeting with the RBI Board, Chidambaram said he was happy that the Governor acknowledged that the government through Parliament will set an inflation target and then leave the regulator to find ways and means to achieve it.

"I think that is the correct approach. The sovereign has the right to set the target and then the central bank has the mandate to take steps to achieve the target. I think that there is a great degree of convergence on the way to go forward," Chidambaram added.

To a query on capital infusion in public sector banks, Chidambaram said it is time to "look for new or innovative" ways to raise more capital for the banks.

"We are looking at issuing shares to employees. We are looking at rights issue for minority shareholders. There was some discussion about non-voting shares but I think the time has come to look for new or innovative ways to raise more capital for the banks," he said.

He, however, added that the decision in this regard will be taken by the next government as ‘that is the appropriate way to go about it’.

Rajan said there is a need to create a process for capital raising and it would be worked out over time.

"We have to give them (banks) more confidence that they will give adequate returns. We will work out over time. So it is a process. The Finance Minister mentioned different forms of capital raising so these will be explored," he said.

JPN/Agencies

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