Finance minister P Chidambaram on Thursday said some tough decisions taken by the government recently may have caused “immediate pain”, but they were necessary to bring down fiscal deficit.
Addressing the National Development Council (NDC) meeting here, Chidambaram said, “It was imperative to contain fiscal deficit by augmenting resources and controlling expenditure.” The finance minister has repeatedly said that the government will restrain its fiscal deficit target at 5.3% of the GDP against 5.9% registered in the last fiscal year.
He further added, “Some measures may cause immediate pain but this was necessary to ensure that the fiscal deficit came down to 3% in the next three years. Steps were also being taken to contain the current account deficit (CAD).”
The government, in the recent past, has hiked diesel prices by over R5 per litre and capped the number of subsidised LPG cylinders to six per family in a year.
The FM also underlined the need to control gold import, which has contributed $64 billion to the widening CAD. He, however, expressed optimism that the Indian economy would continue to grow at a healthy rate despite the global economic troubles.
This, he said, is because “our economy has strong fundamentals and factors such as high savings rate, a growing services sector, a large middle class, which continues to create demand and technical and qualified manpower and the youth”.