has repeatedly pledged to lower the deficit to 5.3 percent of GDP this fiscal year and 4.8 percent in 2013/14. But with economic growth languishing around 5.5 percent after the sharpest slowdown in a decade, the finance minister cannot rely on tax revenues to meet his goals.
The finance minister told a budget meeting last month that India had no alternative to meeting the fiscal deficit target and a slippage could have dire consequences, according to a senior bureaucrat who was present at that meeting.
Officials told Reuters that he has already slashed public spending in the current fiscal year that ends in March by some 9 percent from the original target and for 2013/14 he plans to cap it roughly at the same level.
In a Reuters poll conducted earlier this month, 18 out of 23 economists predicted that the focus of Chidambaram's budget speech will be on slashing subsidies and government handouts.
LETTERS TO THE MINISTER
That is not what other ministers wanted from the budget as the government - mired in corruption scandals and widely derided as incompetent in the face of the economic slowdown - faces a struggle for re-election in polls due by May, 2014.
Officials say that the rural development minister argued in one letter to Chidambaram against spending cuts that would hit housing and road construction in poor rural areas, on which the Congress party has traditionally relied for votes. He wrote again this month to avert a possible cut in funding to a rural employment guarantee scheme.
The tribal affairs minister wrote twice to Chidambaram to plead against cuts in welfare spending, worried that they could alienate tribals, who traditionally vote for the ruling Congress party. And the defence minister complained that budget cuts would hobble a grand plan to modernise India's armed forces.
Chidambaram wants these ministers and the railways minister to prioritise their spending, focusing primarily on critical projects, but has held out the prospect of additional funding if revenues pick up later in the year.
In a measure of the many demands Chidambaram faced, the Planning Commission - a powerful body of government advisers - sought an increase