Plan panel role to be confirmed: Finance Minister

New Delhi: The suspense on what role the Planning Commission will play in the Narendra Modi government will end soon. Finance minister Arun Jaitley said Friday in an news agency interview that the Prime Minister will soon make an announcement clarifying the new role of the Planning Commission.The commission, which has played a major role in the country almost ever since Independence has been without a deputy chairman after Montek Singh Ahluwalia resigned following the Congress’ defeat in the general election. The government has also indicated it will consider relaxing the curbs on gold import once the fiscal situation becomes more comfortable.

It seems that the BJP, which had till recently been vociferously voicing its objections to raising the FDI cap in insurance, has no other option now but to accept the increase in the foreign investment limit to 49 per cent in that sector, that was announced as part of the Union Budget on Thursday.

“What I have (said) reflects the policy of the government, and the party would support the government. This issue has to go to Parliament. I have said that we prefer a 49 per cent cap,” said Mr Jaitley.

On expectations by analysts that he could have revised upwards the fiscal deficit target set by the previous government, the finance minister told a TV channel that if he would have done so, it would have raised questions about the credibility of data announced by the Indian government.

He warned that markets would have reacted negatively to any such move. “I had an option to get into a slanging match with the earlier government. Start questioning the credibility of India’s economic data and I start questioning everything that the previous government has done, create panic in the market, and therefore allow markets to tumble and people lose faith in the very accounting of the Indian system. I didn’t want to choose that course,” Mr Jaitley added.On why he raised the FDI cap only upto 49 per cent and not 51 per cent in defence, the finance minister said the Indian political system will find it easier to accept that decision.