Agencies, New Delhi
Union Finance Minister P Chidambaram today iterated that the rupee will correct itself in the due course of time and the prime requirement would be to tackle three macro economic parameters — inflation, fiscal deficit and current account deficit (CAD).
Replying to the Lok Sabha debate on the Demand for Supplementary Grants for around Rs 7,500 crore, Mr Chidambaram said the depreciation of the currency though a matter of concern is a phenomenon which has also engulfed emerging economies, including Lira and Riyal.
The Finance Minister said the currency correction phenomenon will take place through the market mechanism and categorically stated that the government will leave no stone unturned to correct the growth rate, CAD and fiscal deficit.
He said in no case the fiscal deficit will breach the red line of 4.8 per cent of the GDP, adding this is a year of fiscal consolidation.
He said the economy is going through stress and it is disappointing that the growth rate in the first quarter has declined.
Mr Chidambaram, however, said there is no need to look at the situation with pessimism and there should be no room for gloom and doom.
He said most of the states are doing well vis-a-vis the national economic parameters and only two states have reported lower growth rate than the national average.