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Forex reserves will absorb oil shocks, says Jaswant

Our Bureau

NEW DELHI, Dec. 20.

THE Finance Minister, Mr Jaswant Singh, today said that the comfortable forex reserves position would enable the Government to absorb the spurt in global crude prices due to the war-like situation developing in Iraq.

"With forex reserves crossing $68 billion, we will not feel the pinch of the volatility in global crude prices and be in a position to absorb the impact for more than two years,'' Mr Singh told reporters here shortly after the adjournment of the Winter session of the Parliament.

The basic message was that the economic fundamentals were strong and the Government would continue with the reform process which was expected to gather momentum with the passage of key financial legislations — including the Securitisation Law, UTI (Transfer of Undertaking and Repeal) Bill and the SEBI (Amendment) Bill. "The passage of the legislations gives the kind of support systems required for the annual Budget exercise,'' Mr Singh said.

At the same time, however, the Finance Minister was candid enough to admit that there "was no magical solution to rein in fiscal deficit.''

Lower rates for pension funds?

NEW DELHI: THE Finance Minister, Mr Jaswant Singh, said that the interest rate on pension funds needed to be brought in line with the declining interest rates in the market.

"Yes, interest rates are declining. But pensioners, senior citizens and widows are in the high-risk category and we are concerned about maintaining their returns,'' Mr Singh said.

The statement assumes significance as it endorses the recommendations made in the mid-year review of the economy, which talked of rationalisation of interest rates on small savings. Mr Singh, however, reiterated that the concerns of pensioners would be addressed.

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