Finance Minister P Chidambaram on Thursday said the government will reassess its fiscal position for 2012-13 in the mid-year economic review considering the rising expenditure and resource mobilisation efforts.
“The fiscal deficit target for the current financial year will be reassessed after mid-year review depending on the pace of expenditure and resource position of the government,” Chidambaram said in the Rajya Sabha.
The government has set a fiscal deficit target of 5.15% of GDP in the current fiscal. In 2011-12 fiscal, it had surged to 5.76% on account of high fuel subsidy outgo.
“The Government is keeping a strict vigil on the Indian economy in the current financial year. Government has reverted to the path of fiscal consolidation with gradual exit from the expansionary measures in a calibrated manner,” he added.
The Indian economy is in the midst of a slowdown with the GDP growth touching a nine-year low of 5.3% in January-March quarter of 2011-12.
He said the reduction in the fiscal deficit is targeted with a mix of reduction in total expenditure as percentage of GDP and improvement in gross tax revenue.
A committee comprising Vijay Kelkar, Indira Rajaraman and Sanjiv Misra has been constituted to assist in formulation of a fiscal consolidation roadmap.
According to latest data, the fiscal deficit in monetary terms stood at `1.9 lakh crore or 37.1% of the 2012-13 target in April-June.