Chidambaram dubbed the UPA's Common Minimum Programme as a bold declaration on reforms and said it gave him room to take more initiatives in the reform process.

Dubbing the United Progressive Alliance's Common Minimum Programme as a bold declaration on reforms, Finance Minister P Chidambaram on Friday said it gave him enough room to be creative and take more initiatives in the reform process.

Chidambaram's statement assumes significance as the government is to begin the exercise on Budget shortly.

• CMP: It's more smoke than fire
• Budget likely on July 2 or July 5
• Thumbs down for many reforms
• Govt to raise taxes; vows growth

"CMP reaffirms every reform initiative. There is a reaffirmation that is binding to reforms. I think this is a bold declaration as can be made by any government and it gives me enough room to be more creative and take more initiatives," he told reporters in New Delhi.

Priority to investment in agriculture

Highlighting that the CMP emphasised on reforms with a 'human face,' he said his objective was to see that the highest priority was given to investment in agriculture and infrastructure and augmenting rural credit.

In keeping with CMP's vision with regard to foreign direct investment, Chidambaram said the country could absorb about $10-15 billion every year.

"The country needs and can absorb FDI inflow to the tune of about $10-15 billion. We will actively seek FDI in infrastructure, high-technology areas and exports," he said.

He, however, said that the government would take measures to prevent misuse of double taxation avoidance treaties.

Govt to encourage public-private pacts

On infrastructure development, he said the government would encourage public-private partnerships and the role of private sector would be enhanced along with public investment.

Expressing optimism on the growth front, he said if monsoons were good, India could achieve over 8 per cent growth.

Taxes

Defending the cess on taxes, he said: "I don't think anyone can question the purpose of cess," which has been earmarked for education and health sectors.

He also said that tax rates will be conducive to growth and investment.

The finance minister pointed out that as listed in the CMP, the interest rates would take care of savers and investors. "A balance would be struck," he said.

Loss-making PSUs to be sold or shut

He said that Navratnas fell in one category, companies that can sustain in open global competitive environment fell in another, while the others fell in the third category.

He said: "Generally, profit-making companies will not be privatised which means they must have the potential to make profits on a sustained basis in a competitive and open economy."

"Loss-making companies will either be sold or shut down," he added.

Chidambaram clarified that private investment in the power sector was not linked to the unbundling of State Electricity Boards.

"Private players can come and invest in both power generation and distribution areas," he said.

The finance minister observed that there was buoyancy in tax collections, and tax administration had become more efficient than it was 13 years ago.

To a query on how the resources would be raised for the massive public investment in agriculture, infrastructure and manufacturing, he said: "We are working on it and I think we can find resources that are critically required."