Here are 10 key takeaways from the FM's meeting
Politics: Highlighting the importance of democratic politics, Mr Chidambaram stressed upon the fact that he has the support of "invisible politics" to implement reforms. He reiterated that the reform momentum of recent months will be sustained by the government.
Growth: Mr Chidambaram said India's gross domestic product in fiscal year 2013-14 will likely be 6.5-7 per cent and 8 per cent by fiscal year 2014-15. The long term target is to increase revenues and not by just increasing taxes. Railways tariff hikes will fetch the government $1 billion (Rs 5,500 crore).
Fiscal deficit: Mr Chidambaram said his target was to reduce fiscal deficit by 60 basis points every year for the next four years and get it down to 3 per cent. He also promised that deficits will be contained without raising taxes. There is a possibility that the government cuts its expenditure without impacting growth and revenue numbers, and stick to 5.3 per cent fiscal deficit for FY13 and therefore fiscal consolidation path.
Budget: Mr Chidambaram allayed fears that the Union Budget to be announced next month could be more populist and aimed at elections. He seemed to have a clear four to five year plan/vision rather than the next 12-15 months going into the election, Citigroup said.
GAAR: It has been postponed till April 2016 and will not be applicable to FIIs whose intention is clear, i.e., not to avoid taxes using tax treaties. An approving committee has been set up which will include a chief justice of High or Supreme Court, an outside scholar and one person. This will be the final committee who has the authority to supersede the income tax authority and the SEC.
Bond market: Debt funds ceiling has been increased to $75 billion from $66 billion. Government's bond ceiling has been increased to $15 billion from $10 billion with no residual maturity. Corporate bond ceiling has been increased from $20 billion to $25 billion. These are not new announcements but are yet to be notified by market regulator SEBI.
Infra push: The government is thinking to remove the lock in period for infra bonds, which was 12 months earlier. If they remove this lock in period, it will be a new announcement, Citi said. Three Infrastructure development funds have been approved and another six are in the pipeline.
Cabinet Committee for Infrastructure: The committee will solve all inter-ministerial issues on project and their first meeting is at the end of the month. Infra growth is top priority for the government.
Goods & Services Tax: All states are on board. Target is to introduce Bill in August and pass it by December. A committee has been set up and on January 25 they are going to come out with a report on design of GST. There will be two-level GST: State and Centre level.
Know Your Customers norms: A committee has been set up in September 2012 to simplify norms. The government has done away with many documents like balance sheet, net worth certificates. The idea is to simplify the process and have just one common KYC platform which will be accepted by other institutions as well.
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