Millennium Post

Will reassess 5.1% fiscal deficit target: FM

The government will reassess its fiscal position for 2011-12 in its mid-year economic review, taking into consideration rising expenditure and resource mobilisation efforts.

‘The fiscal deficit target for the current financial year will be reassessed after mid-year review depending on the pace of expenditure and resource position of the government,’ finance minister P Chidambaram said. The government aims to bring down the fiscal deficit- the gap between expenditure and revenue collection - to Rs 5.13 lakh crore or 5.1 per cent of GDP in the current fiscal. In 2011-12 fiscal, the deficit had ballooned to 5.76 per cent of GDP on account of high fuel subsidy outgo.

‘Government is keeping a strict vigil on the Indian economy in the current financial year.

Government has reverted to the path of fiscal consolidation with gradual exit from the expansionary measures in a calibrated manner,’ Chidambaram said. The economy is facing slowdown with the economic growth touching a nine-year low of 6.5 per cent in 2011-12.

Chidambaram said the reduction in the fiscal deficit is targeted with a mix of reduction in total expenditure as percentage of GDP and improvement in gross tax revenue. A committee comprising Vijay Kelkar, Indira Rajaraman and Sanjiv Misra has been constituted to assist in formulation of a fiscal consolidation roadmap. For the April-June period, the fiscal deficit in monetary terms stood at Rs 1.9 lakh crore, or 37.1 per cent of the 2012-13 target.
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