India defers spend to axe fiscal deficit
India's economic growth is expected to slow to about 5.5 percent this fiscal year, the slowest pace in a decade, while rating agencies S&P and Fitch say higher spending and rising subsidies could push the fiscal deficit to 6 percent of GDP.
Those expenditure that can be moved to the next year would be moved, instead of being done this year, Arvind Mayaram, economic affairs secretary at the ministry of finance said in an interview.
He said the government was determined to keep the deficit to 5.3 percent of GDP this fiscal year, and would take all necessary steps for this purpose. However, he ruled out drastic, across-the-board spending cuts.
Analysts have expressed doubt about whether the government would be able to keep the deficit even to that level.
Prospects for a material improvement in the fiscal position in the near term are remote, leaving intact the risk of a sovereign downgrade, Anjalika Bardalai, an analyst with political risk consultants Eurasia Group, said in a recent research note.
In March, the government budgeted 14.9 trillion rupees ($273.12 billion) spending in 2012/13 fiscal year. It estimated revenue of 9.4 trillion rupees ($172.30 billion) and targeted a fiscal deficit of 5.1 percent of GDP.
But delays to planned economic policies and the global slowdown have impacted growth and tax
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