Govt looking for ways to stabilise FPI inflow, will stick to the 3.3% fiscal deficit target for current fiscal: Subhash Chandra Garg

New Delhi: With about $11 billion foreign portfolio investments outflow this year, the government is trying to find ways to ensure stability of FPI fund flows into the financial markets, Economic Affairs Secretary Subhash Chandra Garg said Tuesday. He said developments like bond yield cycle, taxation reforms, in the US have not hurt Foreign Direct Investment (FDI) flow into the country. “What has been affected is financial sector investment. We have seen some withdrawal specially in the debt market. This year we have seen close to about $10-11 billion of outflows. This volatility is what concerns us,” Garg said speaking at an event in New Delhi. [caption id=“attachment_5251131” align=“alignleft” width=“380”] Economic affairs secretary Subhash Chandra Garg. Image courtesy - Twitter[/caption] “We are trying to find ways where portfolio investment become more stable rather than behave in this unstable way,” Garg said. He said the government will stick to the 3.3 percent fiscal deficit target set in the budget for current fiscal. “This year despite all pressures coming from oil, etc, the government has steadfastly stuck with that under no circumstances we will allow fiscal slippage,” Garg said. During the April-September period, the Centre’s fiscal deficit has widened to 95.3 percent of the Budget Estimate (BE) to Rs 5.94 lakh crore, mainly on account of slow growth in revenue collections. The fiscal deficit in 2017-18 was 3.53 percent. Moody’s Investors Service had in August said there are risks of India breaching the 3.3 percent fiscal deficit target for 2018 as higher oil prices will add to short-term fiscal pressures.