Oil prices, monsoon will have impact on fiscal deficit: Gopalan

International oil prices and the behaviour of monsoon rains will have implications for the Indian government's finances, Economic Affairs Secretary R Gopalan said here today.

The Reserve Bank of India (RBI) had expressed concern earlier this month that if domestic retail prices of petrol and diesel are not aligned with international market, "the fiscal deficit will widen".

Widening of the fiscal deficit would counter the steps taken to moderate demand and arrest inflation, the RBI had said in the monetary policy.

Talking to reporters on the sidelines of a Ficci event here, Gopalan said crude oil prices and the behaviour of the monsoon rains would be the key factors in determining the fiscal deficit.

"The Finance Minister had told very clearly that if the international oil situation remains the same as it is today (about $120 a barrel) and if the monsoon is not going to be responsive, obviously numbers will have to undergo a change," he said.

The fiscal deficit for the current financial year has been pegged at 4.6% of the Gross Domestic Product.

However, he said the government would strive to stick to the fiscal deficit target set in the Budget 2011-12.

"We will certainly maintain fiscal deficit as much as we have prescribed," Gopalan said.

Earlier this month, Finance Minister Pranab Mukherjee had also expressed concern over high crude oil prices, saying any further rise in prices may pull down India's economic growth to 8% in 2011-12 from a projected 9%.

The Indian Meteorological Department (IMD) has forecast that the country is expected to receive normal monsoon rains this year.