New Delhi/Mumbai, January 1
As he gets ready to present his seventh national budget in February, finance minister P. Chidambaram on Tuesday said fiscal deficit targets for 2008 would be met and held out an assurance of moderation of taxes rates, if compliance was met.

“Let me recall what I said. ...If voluntary compliance increases, then there is a case for moderation,” Chidambaram said. “That does not mean it’s been accepted. You make a case for moderation instead of writing imaginary stories.” The FM also drew comfort from the fact that tax collections this year were healthy. “In April-December, the growth in corporate tax collection is better at 40 percent and personal income tax at 50 per cent.”

The New Year is also likely to bring in good news for borrowers as interest rates on home and consumer loans could decline from the second quarter onward, but high fuel and food prices might play spoilsport by putting pressure on inflation, bankers and economists feel.

Experts feel that interest rates have peaked and with deposit rates on the decline, consumers could see softening of interest rates in 2008 as the prudent stance of Reserve Bank for almost the whole of last year managed to keep inflation low without disrupting economic growth.

“Our margins were a bit strained during the year but now banks have begun reducing deposit rates. With RBI’s objective to keep inflation close to three per cent in the medium term, interest rates are bound to come down,” Union Bank of India Chairman and Managing Director M V Nair said. — Agencies