The government today said it will return to the FRBM target for fiscal deficit at the earliest, as soon as the negative effects of the global economic crisis on India are overcome.
The Fiscal Responsibility and Budget Management Act required the government to bring down the fiscal deficit to 2.5 per cent of GDP by 2008-09.
However, because of the steps taken by the government to stimulate the Indian economy reeling under the impact of the global financial meltdown, the fiscal deficit has soared to 6.2 per cent.
The government has pegged the fiscal deficit for 2009-10 at 6.8 per cent, much above the target prescribed by the FRBM Act.
In a written reply, Minister of State for finance Namo Narain Meena told the Lok Sabha, "the government intends to return to the FRBM target for fiscal deficit at the earliest and as soon as the negative effects of the global crisis on the Indian economy have been overcome,"
Meena said the government would initiate institutional reforms encompassing all aspects of budget like subsidies, taxes, expenditure and disinvestment to bring fiscal deficit under control.
He said a roadmap has been prepared where it has been indicated that the fiscal deficit will be brought down to 5.5 per cent of GDP in 2010-11 and 4 per cent of GDP in 2011-12.