In an encouraging development for the economy, Finance Minister Arun Jaitley underscored fiscal deficit targets for current year, which was once termed as 'difficult' is likely to be achieved. The government has pegged fiscal deficit target at 4.1% of the GDP for the current year. Notably, reflecting a worrisome financial situation, the government’s fiscal deficit at the end of November touched almost 99% of the target for the entire year. The fiscal deficit, difference between the government’s expenditure and revenues, stood at Rs 5.25 lakh crore, just short of the Rs.5.31 lakh crore target for the entire year.
The minister also pointed to manufacturing sector showing signs of turnaround. After contracting 4.2% in October, industrial production increased at a five-month high of 3.8% in November. The Index of Industrial Production (IIP), which had contracted 1.3% in November 2013, rose 2.2% in the first eight months of this financial year, against only 0.1 per cent in the corresponding period of 2013-14.
He asserted that despite the revenue being challenging due to slow manufacturing industry, the economy was turning around and sufficient enough to achieve fiscal deficit targets.
The minister, while pointing to the plight of others nations like Brazil, South Africa, China and Europe, highlighted that India was performing relatively well. He pointed that while China which maintained a growth rate of over 9% over 3 decades was looking at new normal, India’s growth after witnessing depressing slowdown in last 2-3 years, was looking up.