The government is not comfortable with the GDP growth target of 5.7 percent and will have to take more measures to revive growth, Chief Economic Advisor Raghuram Rajan said at a press conference today.
Earlier in the day, the government in its mid-year economic review lowered its official growth forecast for the fiscal year to between 5.7 and 5.9 percent. It, however, said the government was on track to meet a fiscal deficit target of 5.3 percent.
In keeping with the government stance, Rajan also said the aim is to reduce fiscal deficit to 5.3 percent.
He also hoped a pick-up in corporate profits will add to tax buoyancy. This will help increase tax revenue of the government.
He said the government is taking steps to strengthen bond and equity markets. There is a need to deepen the corporate bond market.
According to Rajan, there is some pipeline pressure in inflation due to the fuel price increase. He, however, sees inflation moving downward as softening of international edible oil rates may cut domestic inflation.
He noted that core inflation in WPI has been coming down in the past two months.