Govt set to rein in fiscal deficit at 'a little above 5.2% of GDP'
It will be “a little above 5.2 per cent” as against the revised target of 5.3 per cent of the GDP, according to sources.
Coupled with further fiscal consolidation measures that are likely to be unveiled in Chidambaram’s Budget Speech next week, the better-than-expected fiscal deficit for FY 2012-13, said sources, will have a positive impact on the inflationary trend and address the concerns of the Reserve Bank of India that may ease its current anti-inflationary monetary policy stance leading to further cuts in interest rates.
Ahead of the general elections in 2014, it is the last full Budget of the UPA government. Ruling out the possibility of a pre-election populist Budget, a senior government functionary told The Sunday Express, “Unlike pre-election Budgets in the past, which were marked by populist bonanzas to please different sections of the people, the coming Budget will aim at bringing investments into the country, which will create jobs for the people. Everybody has a stake in a stable economy with high growth prospects.”
While Chidambaram’s predecessor Pranab Mukherjee had overshot the fiscal deficit target of 4.6 per cent in the last financial year by a huge margin — it ended up at 5.9 per cent of the GDP