New Delhi: The government will reassess its fiscal position for 2011-12 in its mid-year economic review, taking into consideration rising expenditure and resource mobilisation efforts.
"The fiscal deficit target for the current financial year will be reassessed after mid-year review depending on the pace of expenditure and resource position of the government," Finance Minister P Chidambaram said in a written reply to the Rajya Sabha on Thursday.
The government aims to bring down the fiscal deficit- the gap between expenditure and revenue collection - to Rs 5.13 lakh crore or 5.1 percent of GDP in the current fiscal. In 2011-12 fiscal, the deficit had ballooned to 5.76 percent of GDP on account of high fuel subsidy outgo.
"Government is keeping a strict vigil on the Indian economy in the current financial year. Government has reverted to the path of fiscal consolidation with gradual exit from the expansionary measures in a calibrated manner," Chidambaram said.
The Indian economy is facing slowdown with the economic growth touching a nine-year low of 6.5 percent in 2011-12.
Industrial production in June declined by 1.8 percent from a growth of 9.5 percent in same month last year due to poor show by manufacturing and capital goods sectors.
The factory output in the April-June quarter too contracted by 0.1 percent against an expansion of 6.9 percent in the similar period last fiscal.
Chidambaram said the reduction in the fiscal deficit is targeted with a mix of reduction in total expenditure as percentage of GDP and improvement in gross tax revenue.
The government, Chidambaram said, has already taken steps to control fiscal deficit, by mobilising revenue and restricting expenditure.
Also a committee comprising Vijay Kelkar, Indira Rajaraman and Sanjiv Misra has been constituted to assist in formulation of a fiscal consolidation roadmap.
For the April-June period, the fiscal deficit in monetary terms stood at Rs 1.9 lakh crore, or 37.1 percent of the 2012-13 target.
Achieving the 5.1 percent target for the current fiscal seems challenging in view of rising oil, food and fertiliser subsidy bills.
First Published: Thursday, August 23, 2012, 17:43