India’s debt not sustainable, says Chidambaram

Finance minister P Chidambaram today said the country's debt is not sustainable and sought support of all political parties in strengthening the government's efforts to contain both fiscal and current account deficit.

The debt of a country must be sustainable and should be within limits, Chidambaram said adding that no country can live beyond its means. He said that the countries, which have accumulated un-sustainable level of debt are now facing economic and financial problems.

Addressing the fourth meeting of the consultative committee attached to his ministry on the issue of `The Economic Impact of Internal and External Debt', the finance minister said the best efforts would be made to contain the country's fiscal deficit at 5.3 per cent, during the current financial year even though the Kelkar Committee has projected it at around 6.1 per cent.

He said though the target of 5.3 per cent is a challenging one, it is still doable. The strategy to achieve the target would be to maximise revenue collections and control expenditure. Chidambaram had, yesterday, unveiled a roadmap for fiscal consolidation.

On the current account deficit (CAD), which presently stands around $70.3 billion, he said, he hoped to bridge the gap through FDI, FIIs and ECBs.

In this regard, he said FDI is not an option, but an imperative, failing which we will have to rely on borrowings to meet the current account deficit. He sought the support of members of all the political parties in strengthening the government's efforts to contain both the fiscal deficit and current account deficit.