FM promises more action in Oct to help meet fiscal target

India would be lucky to meet a target to keep the country’s fiscal deficit at 5.1 percent of the gross domestic product (GDP), Finance Minister P Chidambaram said on Monday.

The government last week raised diesel prices, a politically controversial move aimed at reining in a widening fiscal deficit and reviving investor sentiment.

[caption id=“attachment_459455” align=“alignleft” width=“380”] Chidambaram said India would be lucky to meet a target to keep the country’s fiscal deficit at 5.1 percent[/caption]

The government projects a fiscal deficit of 5.1 percent of gross domestic product in India’s nearly $1.8 trillion economy in the current fiscal year ending in March, while many private economists predict it to reach 6 percent or more.

He also proposed additional measures aimed at fiscal consolidation and economic growth in October. He said the finance ministry expects the Reserve Bank of India (RBI) to take more “supportive measures” in its next policy review.

“I am very confident that between now and 30 October, since the government is expected to take a number of additional policy measures and also lay out the path of fiscal correction,” Chidambaram said on the sidelines of Planning Commission meeting on Monday.

Agencies