Sunday, March 6 2005 11:08 Hrs (IST) - World Time -

New Delhi: Asserting that the Union Budget has "not strayed" from the reform path, Finance Minister P Chidambaram has indicated external audit for monitoring the progress of major programmes outlined for the next fiscal.

"We have not strayed from the path of reforms... We will try to get some external audit to measure the outcome of major programmes," Chidambaram said in a wide-ranging interview.

"I am very clear that the financial outlays have to be converted into physical outcomes and we will measure this only by the fiscal outcomes," the Minister told the BBC World.

Stressing that he has made a specific mention about this in the budget speech, Chidambaram said that between the Planning Commission and the Ministry of Finance "we will put in place a mechanism that will measure the development outcomes of major programmes".

"This will happen in the next few weeks," he said emphasising the budget has been very well received by the people.

There were narrow constituencies, which are not happy and "it is not possible to please every one constituency fully or completely".

"By and large even the industry, the market, the corporate sector are happy. They think the budget is pro-growth and the way I look at it is have I addressed the immediate livelihood and other concerns of the very poor people of India," he said.

"Have I ensured that the engines of growth will keep humming and moving along, I believe we have done both. My party is happy and my alliance party is happy."

Laying emphasis on monitoring of projects, Chidambaram said, "What we are going to do is to monitor the spending of the money and ask for the accounts, let us say every quarter."

If the money is not spent or if a project is not on track "we are going to step in and ask why the money is not being spent," he said.

On disinvestment, he said that there is no need for a target now as in the past targeting was complied because one had to bring the funds in the receipts of the budget.

"It (disinvestment) is off-budget now. It is a corpus fund now. It is neither a revenue receipt nor a capital receipt for the budget. This fund has been set up and we have a list of companies that will have to be approved by the Cabinet Committee on Economic Affairs (CCEA)," Chidambaram said.

He said that the Government would undertake disinvestment during 2005-06 once the cabinet clears the proposals.

He said that there is now no artificial pressure to raise the money by March 31 every year. "I just have to raise it over a period of time. So this gives us much greater flexibility."

Also the lead managers of the issue (of disinvestment) will have the flexibility to give the Government the best price, he said adding once the money goes into the fund, the Government will be able to invest the fund in Public Sector Mutual funds and earn a return on it.

He said that once the return is deployed in public sector spending, the people would be able to see the merit in this corpus fund and then the process will gather pace.

Though there is no target, he expected to garner Rs 5,000 to Rs 7,000 crore during 2005-06 provided the PSU companies to be divested are cleared by the CCEA.