Achieving fiscal deficit target will be difficult: Rangarajan

30 Sep 2011 Evaluate

The Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan on September 29 said that the government is likely to miss the fiscal deficit target of 4.6% for the current fiscal as growth is expected to moderate.

The PMEAC Chairman said 'In the current year, the budgeted fiscal deficit is 4.6% (of GDP). It is going to be difficult to achieve this. All the numbers do not gel well,' however by adding further he said 'But I think it should be one of efforts to ensure that fiscal deficit is in the lines of what was estimated.”

Earlier, the economic growth was estimated at 8.2% for 2011-12. PMEAC Chairman said despite a stronger agricultural growth than what was estimated earlier, the economy is expected to grow about 8% during the current fiscal as there are serious concerns. 'Therefore, taking all these factors into account, I believe the growth rate of the economy can be close to 8% per annum,' he added. However, Rangarajan believe that the India can grow by 9% given the saving and investment rates.

Identifying Inflation, balance of payment and fiscal consolidation as the short-term constrain to growth, Rangarajan said 'I believe there are short-term concerns and medium-term constraints which will come in the way of achieving 9% growth'.

Backing Reserve Bank of India’s monetary policy stance on inflation, he said 'In fact today the non-food manufacturing index exceeds 7.5 per cent. Therefore, we should be using monetary policy to tame inflationary expectations.' By adding further he said 'We should use monetary policy in way that demand preference is brought down'.

In last 18 months, the RBI has increased its short term lending and deposit rates by 12 times to control inflation. However, the headline inflation measured by the Wholesale Price Index (WPI) has been hovering around two digit mark.

On the Current Account Deficit (CAD), PMEAC Chairman said 'I don't think that by taking both imports and exports of goods and services taken together we might exceed 2.5% of GDP of the CAD this year.' So far, financing of CAD has not been a problem. The approach paper of 12th Five-Year Plan and our own calculation indicates that we will have CAD of 2.5% of GDP'.

PMEAC Chairman said at present, there is no problem in financing CAD of 2.5%. By adding further he said, 'So long we continue to maintain a healthy growth rate and so long as fiscal deficit continue to remain at reasonable control, there should be no problem in attracting capital flow'.

However, he said that the capital flows by very nature are very volatile. It is influenced by both domestic and international factors. It is also affected by push factor and as well pull factor. So, therefore, we need to moderate our dependence on the financing of CAD through capital flows.

On the borrowing he said 'I think the effort of the government will be to retain the fiscal deficit at the budgeted level and I do not expect the borrowing programme of the government of India as of now to exceed what was originally estimated'.

Create stable, long-term investment portfolio with strong, consistent stocks.

Start Research-backed Investing ...Now. Subscribe to Sapphire

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.