India targets containing fiscal deficit at 4.6 percent

India's fiscal deficit will be contained at 4.6 percent of the GDP in the current financial year and may ease further to 4.1 percent in 2014-15, Finance Minister P. Chidambaram said Monday.

"The current financial year will end on a satisfactory note with the fiscal deficit at 4.6 percent (below the red line of 4.8 percent) and the revenue deficit at 3.3 percent," the finance minister said while presenting the interim budget for the fiscal 2014-15 in the Lok Sabha.

In the union budget for 2013-14 presented last year, Chidambaram had set a target of containing the fiscal deficit or the difference between the government's total expenditure and revenue it generates, excluding borrowings, at 4.8 percent of the country's gross domestic product (GDP).

"Emboldened by the progress made, I have budgeted for receipts and expenditure in 2014-15 that will leave a fiscal deficit of 4.1 percent, which will be below the target set by the new fiscal consolidation path," he said.

Revenue deficit is pegged at three percent of GDP for the next fiscal as compared to 3.3 percent estimate in the current fiscal.

On current account deficit, Chidambaram said it would come down to $45 billion in the financial year ending March 31, 2014 from a record high of $88 billion in the previous year.

He said the government is also hopeful it would add $15 billion to the foreign exchange reserves by the end of the current financial year.

"Analysts and rating agencies had acknowledged our efforts some months ago and no longer speak about a downgrade," he said.

"I hope that domestic experts will now agree that the UPA (United Progressive Alliance) government meant what it said when it put fiscal stability at the top of the agenda," Chidambaram added.