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PC promises a 'sweet dream' Budget

Finance Minister has hinted at cutting fiscal deficit by 0.3% to 4% of GDP.

india Updated: Jan 11, 2006 19:42 IST

Aiming 7-8 per cent growth this year, Finance Minister P Chidambaram on Wednesday hinted at cutting fiscal deficit by 0.3 per cent to 4 per cent of GDP in the coming Budget, which will focus on rural India and the masses.

"Growth is a function of investment. If we can boost investment in 2006-07, I am confident growth will be as good as 2005-06," he said during an interaction with Forum of Financial Writers here.

India's GDP had grown by 8.1 per cent in first half of 2005-06, and is expected to be over 7.5 per cent this fiscal.

Asked whether Indians can expect another "dream budget" from him this year too, he said, "A Budget together with other major policy initiatives taken by government promotes growth of say over 7 or 7.5 or 8 per cent, it can be classified as a good or sweet dream."

While asserting that UPA will carry forward reforms and take measures to foster growth, Chidambaram said the budget will always focus on the people of India, the common man and people in rural areas.

At the same time, he said UPA was committed to cut fiscal and revenue deficits as mandated in the Fiscal Responsibility and Budget Management Act.

"I am obliged to adhere to the FRBM discipline (both for fiscal and revenue deficit). That's what FRBM says," he said, indicating that government is expected to cut fiscal deficit by 0.3 per cent to 4 per cent and revenue deficit by 0.5 per cent to 2.2 per cent in 2006-07.

The statement assumes importance, as Chidambaram had in his last budget pressed the "pause button" on meeting FRBM targets and retained fiscal deficit target at 4.3 per cent and revenue deficit at 2.7 per cent.

For 2005-06, Chidambaram said, "I expect it (deficit) to be on target at the budget estimate."

First Published: Jan 11, 2006 13:43 IST