India?s fiscal deficit for 2013/14 may be lower than its budgeted target of 4.8% of gross domestic product, as exports increase and subsidies are reined in, finance minister P Chidambaram said on Friday.
?Our fiscal deficit for 2012/13 is estimated at 5.2 percent but we will do better. The Budget for 2013/14 estimates a fiscal deficit for 4.8 percent. If I do better, when the actuals for last year come in, I would be obliged to do better than 4.8 percent this year. I am confident that the fiscal deficit will steadily reduce to 3 per cent or even less by 2016/17,? the minister said at an event at the Asian Development Bank summit in Greater Noida.
He said that the fiscal consolidation would be achieved by controlling subsidies through rationalization of fertilizer subsidies, caps on subsidised LPG cylinders, rationalisation of diesel prices and introduction of direct benefit transfer system to eliminate leakages.
Chidambaram also added that India could achieve 8 percent economic growth within the next three years. ?I am confident that beginning 2013/14 we will climb back (on the growth ladder) to 6 percent this year, 7 percent plus next year and to our potential growth rate of 8 percent in the third year,? he said. “In 2012-13, India was one of the fastest-growing large economies in the world. Nevertheless, I am not satisfied with the 5%+ growth rate. India?s potential growth rate is 8%+ and we cannot afford to become complacent and sit back,” the minister said.
The government?s optimism comes at a time even when its Planning Commission, headed by Montek Singh Ahluwalia, had raised doubts over achieving an average growth of 8 per cent over the 12th five year plan unless the private sector pitches in with at least half of the projected $1 trillion infrastructure investment for that period.
Ahluwalia also expressed optimism about achieving 8-9 per cent growth in three years and about 6.5-7 per cent growth this fiscal.