“The buoyancy we are witnessing in the economy... will help us in finding requisite funds for infrastructure without prejudice to the fiscal roadmap,” Mukherjee said at a meeting of the Consultative Committee of Parliament attached to the Finance Ministry. India’s economic growth accelerated to 8.8 per cent in the first quarter of this fiscal, after a brief slowdown on account of the global financial crisis.
The government had earlier announced an investment target of Rs 41 lakh crore for the infrastructure sector in the 12th Plan period, beginning 2012, more than double the envisaged spending under the ongoing 11th Plan. He said the ministry “...is committed to bring down the fiscal deficit to 4.1 per cent of GDP by 2012-13.”
The government’s fiscal deficit targets went awry after it provided a stimulus to the domestic industry by cutting taxes and raising expenditure to tide over the global financial turmoil. The fiscal deficit doubled to over 6 per cent of the GDP in 2008-09 against the target of 3 per cent as per the Fiscal Responsibility and Budget Management Act. The fiscal deficit further widened to over 6.5 per cent during 2009-10. After partially withdrawing the stimulus this year, the Finance Minister pegged the fiscal deficit at 5.5 per cent of the GDP in the current financial year. The government aims to reduce it further to 4.1 per cent by 2012-13.
The minister added that progress has been made in the central government’s flagship Bharat Nirman programme, which aims to upgrade rural infrastructure, such as roads, water, electricity and telecom connectivity. Mukherjee said that more than 30 per cent of the total expenditure on infrastructure during the ongoing plan period will be utilised for building and upgrading rural infrastructure.
The Ministry of Rural Development has also taken steps to implement rural development schemes through the Public-Private Partnership (PPP) mode. Terming energy security as a focus area, Mukherjee said during the 11th Plan, power generation capacity would reach around 62,000 MW.
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