High fiscal deficit a strategy to stimulate growth: Mukherjee

High fiscal deficit a strategy to stimulate growth: Mukherjee

Noting that a fiscal deficit of 6.8 per cent was on the higher side, the minister said: "The global economic slowdown is likely to continue in the current financial year... (but) we must come back to growth path as fast as possible."

"No doubt, I have taken a risk... We cannot say we are out of the economic slowdown as yet," he said.

Mukherjee also ruled out any roll back of the stimulus measures announced earlier by the government.

Speaking at an interactive session with industry leaders here, Mukherjee said the government has taken the risk of letting the fiscal deficit rise to achieve a higher growth rate.

Setting a target of bringing down the fiscal deficit to 5.5 per cent in 2010-11 and 2011-12, he said the finance ministry would work hard in the next 7-8 months to achieve this target.

"A single budget cannot solve all the problems," he added.

Mukherjee further said the government was committed to divesting its equity in public sector enterprises, but would retain a minimum of 51 per cent equity in these entities.

He said that the Budget document was perhaps not the appropriate place for a roadmap for disinvestment and it should come out after detailed deliberations with all the concerned stakeholders.

On concerns that the government's huge borrowing would deplete the market of liquidity for corporate borrowers, he said that the borrowing programme would keep in mind the requirements of the private sector.

Responding to suggestions seeking help for the sectors like metals, Mukherjee said that the government's objective is to return to a high growth rate as soon as possible and it decided to invest in areas like rural infrastructure and agriculture as these would give the desired growth rates in a shorter span of time, compared to other segments.

The minister further said that it would be aimed to achieve at least 9 per cent of GDP available for investment in infrastructure by 2014.

He also promised to look into the suggestions towards helping the sugar industry and the affordable housing segments.

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