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Will cut expenditure to contain fiscal deficit: Chidambaram

23 Nov 2012 Evaluate

With fiscal deficit for the first half crossing 65 per cent of budget target for entire year, Finance Minister P Chidambaram has exuded confidence that expenditure would be contained for the current financial year , given government measures for reining in the same.

Government has imposed measures like rationalization of expenditure and optimization of resources with a view of stimulating economic growth. The Investor’s friendly FM added that government will also attempt by employing effort to restrict the expenditure on central subsidies. The government plans to mandatorily cut the non-plan expenditure by 10% in the current financial year.

Pointing the economic slowdown to various factors, including the tight Reserve Bank of India monetary policy, he underscored that government had been taking steps to promote investment and growth. “Among domestic factors, the tightening of the monetary policy to rein inflation resulted in the slowing down of investment and growth, particularly in the industrial sector,” Chidambaram reiterated.

The finance minister has fixed target to contain fiscal deficit at 5.3 percent of the country's gross domestic product (GDP) in the current financial year as compared to 5.8 percent recorded in 2011-12. Further, the government off-lately outlined a road map for fiscal consolidation that target to cut fiscal deficit to three percent by 2016-17.

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