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| Govt to prune unproductive expenditure: Finance Ministry |
| Press Trust of India / New Delhi Aug 04, 2009, 15:03 IST |
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The finance ministry said today it would prune unproductive expenditure and moderate inflation while staying focussed on fiscal consolidation.
"The government will continue to take the necessary measures to moderate inflation, prune unproductive expenditure and closely monitor FRBM targets," the ministry said in its third quarter review of 2008-09.
The process of fiscal consolidation, it said, was "a necessary pre-requisite for sustained growth" and continued to be "in focus."
The fiscal deficit upto the end of the third quarter (April-December) 2008-09 was Rs 2,18,262 crore, nearly thrice of Rs 77,578 crore in the previous year's corresponding period.
The ministry said it would harmonise the need for resources for development expenditure within the fiscal discipline imposed by Fiscal Responsibility and Budget Management (FRBM) Act, 2003.
While the Act required fiscal deficit to be brought down to 2.5 per cent of the GDP by 2008-09, the government's steps to stimulate the economy, impacted by the global financial downturn, soared it to 6.2 per cent last fiscal. Even for the current fiscal, it has been pegged at 6.8 per cent of the GDP.
The government, however, has prepared a roadmap to return to the FRBM target as soon as the negative effects of the economic crisis on India are overcome. It plans to bring down the fiscal deficit to 5.5 per cent of the GDP in 2010-11 and 4 per cent of the GDP in 2011-12.
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