Finance Minister P Chidambaram informed Rajya Sabha on Thursday that the government is confident of restricting the fiscal deficit to 5.3 per cent of GDP in the current fiscal.
During the question hour, Chidambaram said despite the temporary deviation from stringent fiscal consolidation targets necessitated by global financial crisis, the fiscal policy is being steered rapidly back to the path of prudence.
Though the government initially targeted to bring fiscal deficit to 5.1 per cent in the current financial year, later revised it to 5.3 per cent, which was 5.9 per cent in 2011-12.
As per a recent announcement by the government, it wants to bring down the fiscal deficit to 4.8 per cent in the next fiscal, 4.2 per cent in 2014-15, 3.6 per cent in 2015-16 and to 3 per cent in 2016-17.
The government has taken various steps towards expenditure reforms with a view to improving macroeconomic environment, he said. It endeavours to restrict Central Subsidies Bill in 2012-13, Chidambaram said, but added that some subsidy needs to be given towards food, fuel and fertiliser.
The outgo on food, fuel and fertiliser subsidies in 2012-13 is pegged at over Rs 1.79 lakh crore. It also got Parliament's nod for an additional Rs 28,500 crore towards petroleum subsidy in the supplementary grants.
Recently, the Centre has increased price of subsidised diesel and also capped the supply of subsidised LPG cylinders. Chidambaram said government's emphasis is on eliminating effective revenue deficit by 2014-15 and generating adequate surplus thereafter. "This would also help augment resources for financing investment and capital expenditure, including grants for creation of capital assets," he added.
He also said that to mitigate the adverse effects of petroleum price rise, rise in prices of other commodities and the huge crisis in global financial system during 2008-09, government had to explore suitable fiscal as well as policy options and had given three fiscal stimulus packages to cushion the impact of global slowdown.
Chidambaram, however, said the concessions were not to any particular section of people, but measures targeted at revival of economy through sector specific measures.