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Mar 23, 2013 at 02:01pm IST

Chidambaram promises security to J&K, a surge in reforms

New Delhi: Finance Minister P Chidambaram has hinted at steps to restore a sense of security in Jammu and Kashmir by April-May. Addressing the National Editors Conference in the Capital, Chidambaram said that violence in the valley will subside and the present phase of uncertainty will end. He did not, however, specify what measures are being contemplated.

He rejected any suggestion that Jammu and Kashmir was "back to square one" after the execution of Parliament attack convict Afzal Guru and said he hopes that the people of the state will not heed to the call of separatists.

On the question of reforms, Chidambaram said that the government is 'steadily and surely' working on the next generation of reforms to put the economy back on a high growth path. He said that with liberalisation of FDI and other measures, the government has travelled a considerable distance on the road to fiscal consolidation.

In further liberalisation of norms for investment by Foreign Institutional Investors (FIIs) in government securities and corporate bonds, he said norms have been rationalised. "There were a number of sub divisions and in order to rationalise, it is proposed to merge the existing sub limits and create only two broad categories," he said.

One category of basket, he said, will consist of government securities of USD 25 billion and the second basket will consist of all corporate bonds of USD 51 billion. "Therefore from April 1, there will be two baskets, one of USD 25 billion for government securities and (the other) of USD 51 billion for all corporate bonds," he said.

The recent economic reforms include liberalisation of foreign direct investment (FDI) norms in multi-brand retail and aviation, partial deregulation of diesel prices and capping the supply of subsidised LPG.

Referring to the Food Security Bill, Chidambaram expressed confidence Parliament will soon pass it. "I am confident it (Food Security Bill) will be passed soon by Parliament, possibly in the Budget Session itself," he said.

To a query regarding West Bengal Chief Minister Mamata Banerjee's allegations that Centre was discriminating against the state in allocation of funds, the Finance Minister said funds are allocated to states as per the Constitution and recommendations of the Finance Commission.

The Minister further said that he has never favoured the idea of special package for states. However, he said, the new Finance Commission has been asked to look into the problems of debt stressed states and advise government on how to deal with them.

Chidambaram also announced that the current SEBI auction mechanism allocating debt limits for corporate bonds will be replaced with the system similar to the infrastructure bonds.

Referring to global economy, the Minister said the euro zone crisis has impacted investment around the world and India was no exception.

(With Additional Inputs From PTI)