We do not care for deficit targets, says Montek

New Delhi, Aug 29 | Updated: Aug 30 2006, 05:30am hrs
The tug of war between the finance ministry and the Planning Commission over more resources for Plan projects worsened, with deputy chairman Montek Singh Ahluwalia saying he was keen on getting more money for the Eleventh Plan rather than belt-tightening to meet deficit targets.

We really do not care for FRBM (Fiscal Responsibility and Budget Management Act) targets so long as we get the money (for the planned programmes), Ahluwalia said responding to a letter from finance minister P Chidambaram who was not in favour of shifting the FRBM goalposts to provide more resources as suggested by the Plan panel in its approach paper for the Eleventh Plan.

Under the FRBM Act, the government has reduced fiscal deficit by 0.3% and revenue by 0.5% of GDP annually in a bid to wipe out revenue deficit and bring down fiscal deficit to 3% of GDP by 2009.

We are just bothered about the resources for the 11th Plan, Ahluwalia said. On the other contentious issue of current account deficit Ahluwalia said, We are recalibrating the entire thing. It (CAD) depends on the impact of oil prices and domestic investment.

The Plan panel views that the burgeoning CAD will hinder economic growth. The CAD as a percentage of GDP is likely to grow from 2% to 2.8%, as the gdp itself grows 9% from 7% over the five-year period.