Govt to focus on reducing fiscal deficit in budget: Ahluwalia

The finance ministry is likely to focus on fiscal consolidation in the coming budget, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said in an interview to CNBC-TV18.

Containing subsidies is not an easy task and the government is likely to move gradually on this issue, he said. He added that reducing subsidies is not likely to impact inflation significantly and expects food inflation to stabilise at 5-6 percent, while non-food inflation is likely to stabilise in the next few months.

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The government is expected to present a budget in mid-March for the fiscal year that begins on April 1, amid slowing economic growth and mounting concerns about public finances. Admitting that there will be no massive contractionary steps in the coming budget, Ahluwalia said the government will focus primarily on reducing the fiscal deficit.

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On disinvestment in public sector undertakings, Ahluwalia said postponing it is a sensible move as the disinvestment strategy depends on market conditions.