Finance minister Pranab Mukherjee on Wednesday said that he would have to address the slippages in economic parameters in the forthcoming budget. Speaking at industry chamber Ficci’s 84th annual general meeting, he said the situation has not changed much in the last one year.
“As I set about preparing the Union Budget for the next year, I have to take stock of the developments in the past months and find ways to address the slippages, the gaps and building on outcomes that need to be consolidated in the ensuing years,” Mukherjee said, adding that adhering to the fiscal deficit target of 4.6% of GDP in 2011-12 would be a major challenge. However, he said that inflation was moderating and it to be in the range of 6-7% by March-end.
The finance minister said the coming months including the last quarter would be difficult and the growth rate could drop below 7.5% in the current financial year from 8.5% a year ago.
Mukherjee said that there were concerns on the central government finances and performance during the first half on the fiscal front has thrown up risks in both receipts and expenditure estimates.
Though the government had proposed to bring down the fiscal deficit in 2011-12 to 4.6% of the GDP from 4.7% a year ago, the increase in subsidy bill coupled with poor realisation from disinvestment has made the task difficult. However, he said that India’s growth fundamentals are strong and looked more attractive than other economies facing problems of confidence and lack of growth.