The Finance Minister, Mr Pranab Mukherjee, on Wednesday admitted that it would be a great challenge to maintain the fiscal deficit within the budget targets. At the same time, he assured that the inflation would start coming down from December.
Addressing the annual Economic Editors Conference, Mr Mukhejee said, “With the crude prices remaining where they are, it will be a great challenge to maintain the fiscal deficit numbers at 4.6 per cent this year.” He said he would make strenuous attempts to keep the fiscal deficit at around these numbers. Revenue and expenditure trends would be closely monitored and that steps would be taken as deemed appropriate.
Growth story
On inflation, Mr Mukherjee estimated that this fiscal year will end with headline whole sale price index (WPI) around 7 per cent. “Food inflation has significantly dropped from a peak of 20 per cent in February 2010 to about 8 per cent June-July 2011. However, the sources of inflation have now switched to non-food; much of it, as I just mentioned, was due to imported global commodity inflation,” he explained.
Although he was little uncertain about the overall economic growth, still, he said India's growth story will still be among the 10 or so fastest growing nations in the world. “The fact that we feel disappointed that India may grow by around 8 per cent this year shows more than anything else how our yardstick for evaluating India has changed. This to me is good news,” Mr Mukherjee added.
Winter session
The Government will revise the growth target in the mid-term economic review which will be tabled in Parliament during the winter session. An earlier government estimate said that the economy is likely to grow between 8.75 per cent and 9.25 per cent during 2011-12.
In an order to allay the perception of policy paralysis, the Minister listed various decisions ranging from new the Draft Telecom Policy to the guidelines for Infrastructure Debt Fund. He also mentioned that the new Manufacturing Policy by the Group of Ministers while the mining policy is ready for introduction in Parliament. The Land Acquisition Bill has already been introduced in the last session of the Parliament
At the same time, the Group of Ministers is working earnestly to solve the issues related to coal. Many other legislations or amendments are at various stages in an active mode. The RBI is actively engaged in the process of grant of new banking licences, he added.