Disinvestment, sale of 3G spectrum can limit deficit: Tendulkar

Prime Minster's Economic Advisory Council (PMEAC) Chairman Suresh Tendulkar today said the government should raise resources from disinvestment and sale of 3G spectrum to limit the rising fiscal deficit.

"If they (government) manage to tap new sources of revenue, I don't think there should be any problem on fiscal deficit ... New sources of revenues like the sale of 3G spectrum (and) disinvestment," he told reporters on the sidelines of a function organised by the Competition Commission of India.

The auction of 3G spectrum is expected to yield Rs 25,000 to Rs 40,000 crore to the exchequer.

As regards offloading of government's stake in public sector enterprises, Tendulkar said, "the prospects are good for disinvestment."

President Pratibha Patil in her address to joint sitting of Parliament had said, "My government will develop a roadmap for listing and people-ownership of PSUs while ensuring that the government equity does not fall below 51 per cent."

Following the three stimulus packages announced by the government to arrest the impact of global financial meltdown on the country, the fiscal deficit during 2008-09 shot up to 6.2 per cent of the Gross Domestic Product (GDP) from the original estimate of 2.5 per cent.

Tendulkar said that the government should repriortise expenditure with a focus on productive sectors in order to spur growth.     

Replying questions on inflation, which fell to 0.13 per cent for the week ended May 20, the PMEAC chief said though it has declined "there is no possibility of deflation in the country".     

Inflation slipped to over three-decade low figure for the reporting week even as prices of essential food items like pulses, fruit and vegetables, spices and eggs turned dearer.