Deficits falling in India, says IMF

In India, however, the improvement in the headline balance falls short of initial plans and is broadly accounted for by continued strong revenues, restraint in wages, pensions, and interest, and improvements at the sub-national level, IMF April 2011 Fiscal Monitor Report (FM) said.

In 2010, deficits started declining in emerging economies, supported by sustained growth and, in some, higher commodity prices, it said.

The average general government deficit fell by 1 percent of GDP, with revenues surprising on the upside compared with November 2010 Fiscal Monitor, in significant part owing to one-off or cyclical revenues, IMF said citing India, Brazil, and South Africa.

The average headline deficit is projected to fall by 1.25 per cent of GDP and about 1 per cent of GDP in cyclically adjusted terms, but there are significant cross-country differences.