Govt will try to restrict fiscal deficit to 5.3%: Chidambaram

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New Delhi – The government will endeavour to maximise revenue collection and contain expenditure to restrict fiscal deficit to 5.3% of the Gross Domestic Product (GDP) in the current financial year, Finance minister P Chidambaram has said. “Best efforts would be made to contain fiscal deficit at 5.3%, during the current financial year even though the Kelkar Committee has stated that as per the current economic trends, it could be 6.1%,” he said yesterday while addressing the Consultative Committee attached to his Ministry on ‘Economic Impact of Internal and External Debt’.

According to the Minister, “the target of 5.3% is challenging one, yet it is doable”.

Although the government in the Budget had proposed to bring down fiscal deficit in 2012-13 to 5.1% from 5.8% in the previous financial year, it is expected to shoot up on account of various global and domestic factors.

The strategy to achieve the target would be to maximise revenue collections and control expenditure, Chidambaram said, while seeking support of the political parties to deal with economic and financial problems facing the country.

“No country can live beyond its means”, he said, adding that it was imperative to ensure that country’s debt remains sustainable and within limits.

The countries which have accumulated un-sustainable levels of debt are facing economic and financial problems, he added.

The Minister further said that serious efforts would also be made to bridge the Current Account Deficit (CAD) estimated at $70.3 billion by encouraging flow of Foreign Direct Investment and Foreign Institutional Investment.

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