Govt will keep fiscal deficit at 4.8% of GDP: Mayaram

Govt last week announced a host of austerity measures, including 10% mandatory cut in various categories of non-plan expenditure

Committing to keep the fiscal deficit within the budgeted target of 4.8% of the GDP, a senior Finance Ministry official today said the government was open to prune non-essential expenditure to keep public finances under check.

"We are going to finance oil subsidies through budgetary resources. We will keep the fiscal deficit at 4.8%. We believe that our revenues will be in line with what we have anticipated (and) in case there are any shortfall there will be reduction in government expenditure of the non-essential nature," Economic Affairs Secretary Arvind Mayaram said here.

The government last week announced a host of austerity measures, including 10% mandatory cut in various categories of non-plan expenditure, with a view to keep the fiscal deficit under check.

As regards further action to deal with the fiscal deficit, he said, "In case a correction is required to be made in the future in the expenditure, it will be considered at the appropriate time."

The government has set a tax revenue target of Rs 8.84 lakh crore in the current fiscal and proposed to bring down the fiscal deficit to 4.8% from 4.9% in the previous financial year.

Announcing the government's borrowing programme in the second half of the current fiscal, Mayaram said, the market borrowing through dated securities has been pegged at Rs 2.35 lakh crore. It was Rs 3.44 lakh crore in the first six months of the current fiscal.

He further said that Ways and Means Advances (WMA) limit for meeting unexpected expenditure has been fixed at Rs 20,000 crore.

Mayaram said inflation index bonds, which are aimed to project savings from impact of price rise, will be part of the market borrowing programmes.