JOIN USHigher 3G mop up to help snip deficit, says FM
“It (higher realisation from auction of 3G spectrum) will provide me more elbow room. I’m particular to keep the fiscal deficit at the level, which I have projected rather to improve it ... keeping in view both growth and fiscal consolidation, price stability are the ideas of priority to me,” he said in an interview to a business news channel.
“I am feeling comfortable, but I am not overenthusiastic,” he said when asked about the impact on fiscal deficit of 3G auction, which is estimated to fetch over Rs 60,000 crore to the exchequer against the budget estimate of Rs 35,000 crore.
“When I give the final figure to the Parliament, I’d like to give some pleasent surprise to the people that is why I am not making any comment right now... I’m watching the situation. After all, I shall have to go through the whole year,” he added. Mukherjee in his budget for 2010-11 proposed to bring down the fiscal deficit to 5.5 per cent of the Gross Domestic Product (GDP) from 6.7 per cent a year ago. The all-India bid at the end of 30th day of the 3G auction stood at Rs 15,416.56 crore and the revenues to the government at this price would be Rs 62,254 crore against an estimated Rs 35,000 crore in the budget 2010-11. As regards growth, the GDP is expected to record a growth of 7.2 per cent during 2009-10 and is slated to move up to around 8.5 per cent in the current fiscal.
Inflation average
Further, regarding general inflation, Mukherjee exuded confidence that average inflation during the current fiscal will be at 4.5-5 per cent, even though he expressed concern over the impact of price rise on the common man.
“Average annual inflation rate will come down substantially... I think it would not be more than 4.5 per cent to 5 per cent,” he said. The moderation in inflation, Mukherjee said, would depend on the monsoon. “The first prediction is encouraging. They (the Met Department) are saying it would be a normal monsoon this year.”
High food inflation, the minister said, is a matter of concern as it affects the common man the most.
The government has already taken steps to provide subsidised food through PDS to the vulnerable sections.”But unfortunately that mechanism (PDS)was not very effective during the recent crisis,”he said.
On Greece crisis, he said no economy can insulate itself from the impact of global developments. “Volatility of capital flows needs to be watched. We have to be watchful of the developments in Europe.”
Pranabnomics
* 3G auction to fetch more than Rs 60,000 crore
* Licence fee from 3G auction will lower government’s deficit
* Average annual inflation to be around 5 per cent
* Food inflation hovering at 16-17 per cent
* India is not insulated from Greece crisis