Finance Minister Pranab Mukherjee today said that the government intends to bring down fiscal deficit to 4 per cent by 2011-12 even though it projected to widen to an 18-year high of 6.8 per cent of GDP in the current fiscal.
"Fiscal deficit would be 4 per cent in 2011-12 and 5.5 per cent in 2010-11," Mukherjee said in an interview to private television news channel.
"This year, I am hoping to continue with the same (6.8 per cent) because 7 months are left from presentation of today's Budget and to presentation of next Budget in February 2010... From 2010-11 this correction is possible to do with the hope that this year we maintain the GDP growth of 7 per cent," he said.
In his Budget speech the Finance Minister said, "I intend 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."
Fiscal deficit is projected to widen against 5.5 per cent expected in the interim Budget for 2009-10 and 6.2 per cent witnessed in 2008-09 as the Centre's expenditure expanded to an all-time high of over Rs 10 lakh crore and tax income taking a hit due to stimulus packages.
Fiscal deficit was originally estimated at 2.5 per cent of GDP last fiscal but widened to 6.2 per cent after the government cut excise duties by 6 per cent, service tax by 2 per cent and increased planned outlet to spur the slowing-down economy after the Lehman Brothers collapsed in the US.
