Finance minister P Chidambaram on Tuesday said the Food Security Bill has been completely provided for in the Budget and the government will stick to its fiscal deficit target for the current fiscal.
"4.8 per cent of GDP is a red line as far as fiscal deficit is concerned. This red line will not be breached," Mr Chidambaram said.
His comments had little impact on market sentiments, with both the BSE Sensex and the rupee extending weakness.
Dr. Surjit S Bhalla, chairman, O[x]us Investments & Senior Advisor, BluFin told NDTV that the Food Security Bill is a classic example of irresponsible populism.
"I don't think the passing of FSB has increased anybody's appetite for Indian assets. It may have started to decrease the appetite even more...," he added.
The Sensex traded over 300 points down, while the rupee traded at 65.41, just 15 paise away from the all-time low hit last week.
Mr Chidambaram said the rupee is falling in line with other emerging markets currencies and maintained that the currency has overshot its true level.
"We have to be patient and firm and do what is required to be done. Rupee will find its appropriate value," he added.
However, currency expert AV Rajwade told NDTV that the reality on the ground makes it a difficult job for the finance minister to attract FII, FDI flows.
The finance minister also highlighted that the Cabinet Committee on Investment had cleared a number of projects, which is likely to restart the investment cycle badly needed for growth to pick up.
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