FM: Have to face high fiscal deficit in short term
NDTV Correspondent
Tuesday, July 07, 2009
(New Delhi)
Finance Minister Pranab Mukherjee said that the government had to go for a high fiscal deficit in the short term as the global economy was still not out of the woods.ย โThere was no option but to depend on borrowed resources,โ he said at a meet with India Inc. He expects the global meltdown to continue through 2009.
Acknowledging that the government was concerned about the adverse impact of high fiscal deficit in the medium and long term, he said that the fiscal deficit would be brought down to 5.5 per cent of GDP in FY11 and to 4 per cent in FY12.
On the thrust for rural spending in the budget, he said โgrowth cannot be merely statistical, it must be inclusiveโ. Besides, there is also a โneed to boost consumption in rural sector to stimulate demandโ, he added.
The economy must come back to growth path as fast as possible and the measures taken in the budget is aimed at boosting infrastructure and demand for goods, he said. The large investment in rural sector, he added, will give the desired growth in shortest time.