Amid slowdown in economic activities, the government today said itwill reassess the fiscal deficit target of 5.1 per cent of GDP for the currentfiscal after mid-year review of the economy.
The government aims to bring down fiscal deficit - the gap between expenditureand revenue collection - from 5.9 per cent of GDP in 2011-12 to 5.1 per cent orabout Rs 5.13 lakh crore in current financial year.
"The fiscal deficit target for the current financial year will bereassessed after mid-year review depending on the pace of expenditure and resourceposition of the government," Finance Minister P Chidambaram said in RajyaSabha.
He said the reduction in the fiscal deficit is designed with a mix of reductionin total expenditure as percentage of GDP and improvement in gross tax revenue.
The government has taken several steps including 10 per cent mandatory cut onnon-plan expenditure and economy measures like rationalisation of expenditureand optimisation of available resources.
Also, the government endeavours to restrict expenditure on central subsidies.
"Similar steps are expected to be continued in the coming years to containthe fiscal deficit," Chidambaram said.
The Indian economy is facing slowdown with the economic growth touching anine-year low of 6.5 per cent in 2011-12.
Industrial production in June declined by 1.8 per cent from a growth of 9.5 percent in same month last year due to poor show by manufacturing and capitalgoods sectors. The factory output in the April-June quarter too contracted by0.1 per cent against an expansion of 6.9 per cent in the similar period lastfiscal.