The Hindu Business Line : 5.6 per cent deficit not unsatisfactory: Jaswant

THE Union Finance Minister, Mr Jaswant Singh, on Thursday admitted that fiscal deficit was a major source of worry, but said a fiscal deficit at 5.6 per cent of GDP for the coming year was not "unsatisfactory" given the adverse circumstances.

"I am not putting out excuses. But at 5.6 per cent of GDP fiscal deficit despite adversities is not unsatisfactory," Mr Singh said, adding that he was taking the views of the Opposition to contain fiscal deficit "very seriously".

"Resources are finite and the Finance Minister's ability is limited. It is not possible to reduce it with a magical waving of the wand," Mr Singh said, while winding up the discussion on the Union Budget in the Rajya Sabha.

Agreeing with the members that corruption in the country was worrisome, Mr Singh said bureaucratic reforms and rooting out of the menace would add at least two to three per cent growth though there is no scientific basis for it.

Responding to fears expressed by members about a rise in inflation in the face of soaring global crude oil prices and threat of Iraq war, Mr Singh said that he was concerned about it and both Government and RBI would be monitoring the situation.

"We will do whatever it takes to keep it under control," he said, pointing out that the overall rate of inflation was not alarming as made out to be.

In fact, the Finance Minister said that the average inflation on year-to-year basis was 2.99 per cent on March 1, 2003, compared to 3.89 per cent in the corresponding period last year.

There has, however, been acceleration in inflation rate since early September 2002 mainly due to drought and uncertainty in the Gulf. The inflation rate had touched 5.4 per cent in a week in February, but has come down since then to 4.69 per cent in March. "We expect the inflation to remain low once the effects of drought and the Gulf war are mitigated," he said.

Focussing attention on agriculture, Mr Singh refuted the Opposition's charge that the Union Budget is "anti-farmer" and said that the NDA Government has taken steps to develop infrastructure.

"How can anyone say that we have acted against farmers?" he asked.

Mr Singh said India has the largest irrigated landmass in the world and the agriculture sector requires introduction of technology to move up the value chain. He said the Budget had several proposals to boost agricultural activity and the Government will strive to introduce more measures in future as well.

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