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Govt committed to contain fiscal deficit to 5.3% of GDP in FY13: PM

13 Feb 2013 Evaluate

Worried over the prevailing economic slowdown, Prime Minister Manmohan Singh said the government is committed to containing the fiscal deficit to 5.3% of GDP this fiscal and various steps are being taken to revive economy including faster clearances to mega projects among others. While addressing the conferences of governors, he said that Indian economy has slowed down considerably in the last two years and for this fiscal, it is expected to resister much below growth than the average growth of about 8 percent that achieved in the last decade.  

By adding further he said 'global as well as domestic factors have caused this economic slowdown. It is imperative that we do everything possible to reverse this trend and the government has made concerted and serious efforts in recent months to revive investment and growth'. Efforts are being made to fast track investment proposals with particular focus on clearances from the environment and forest angles as well as towards removal of infrastructural bottlenecks.

Further highlighting the investment hurdles faced by the country, Singh said investment climate is also affected by the activities of state governments and factors like the state of law and order and how easy or difficult it is to acquire land and obtain electricity connections also have an important influence on the climate for investment.

Emphasizing large fiscal deficit as a specific cause of concern he said a fiscal consolidation roadmap has already been put in place to lower it gradually and policy measures announced in the current year have generated optimism which is reflected in an upturn in the Business Expectations Index for the October-December quarter, the Purchasing Managers’ Index in October-December and buoyancy in capital markets.

Regarding the economy recovery, Singh added that the internal accruals of the corporate sector have started improving, which is necessary to pick up investment and there has also been a moderation in core inflation. The recent direct cash transfer scheme will help improve targeting, reduce corruption, eliminate waste and enhance efficiency in the public delivery system. While, the economy expanded by 5.4% in the first half of the ongoing fiscal. However, as per the latest estimates of Central Statistical Organization (CSO), India’s economic growth (GDP) is likely to slow down to 5% for this fiscal as against 6.2% achieved last year. 

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