Govt will try to rein in fisc deficit close to 5.3%

New Delhi:The government will strive to rein in the fiscal deficit within the revised target of 5.3% of GDP for 2012-13, C Rangarajan, chairman of Prime Minister's Economic Advisory Council, said on Monday. 

    The UPA coalition is struggling to meet its fiscal deficit target due to sluggish revenues, delayed stake sales in state-run firms, rising subsidies and lower-thanexpected cash from the auction of second generation (2G) spectrum. "I think the attempt will be to see that we remain as close as possible to revised fiscal deficit that has been indicated by the finance ministry. All efforts will be made to get that number," Rangarajan told reporters on the sidelines of a function. 
    Faced with a challenging situation, the finance ministry recently revised the fiscal deficit target to 5.3% of GDP from the earlier projection of 5.1% of GDP. 
    The government has unveiled a fiscal consolidation plan and has said it is committed to tackle the yawning deficit, which the central bank has said is a stumbling block before easing monetary policy. The finance ministry has also undertaken an austerity drive to tame wasteful spending but economists estimate that the deficit would still be close to 5.8% of GDP. 
    Efforts to sell stakes in state-run firms are yet to take off significantly despite government's commitment to fast-track the process. The government expects to raise Rs 30,000 crore from stake sales in state-run firms in the current fiscal but analysts say it would be an uphill task to meet the target. 
    "I think still there are about four to five months for the end of the year. There are many actions that are possible," Rangarajan said, when asked whether the government would be able to meet its fiscal deficit target. 
    During April-September, the fiscal deficit stood at Rs 3.37 lakh crore, or 65.6% of the full year-target set for 2012-13 compared to 68% in the same year-ago period, government data showed. The former central bank governor also said the Reserve Bank of India will consider several factors into consideration before deciding on interest rates. 
    "We need to watch the behaviour of prices of course, the Reserve Bank will take all factors into consideration. But there is still some time for Reserve Bank to take a decision."

PMEAC chairman C Rangarajan