Amid the talks of fiscal stimulus from the government, a member of the Prime Minister's Economic Advisory Council (EAC) Surjit Bhalla has indicated that government will likely stick to deficit target. He said the government had stuck to its fiscal deficit targets over the past three years and is expected to do so this year as well.
Bhalla said the Council's views on the fiscal deficit has been communicated to the government by its chairman Bibek Debroy, adding that the government is likely to stick to its fiscal deficit target of 3.2 per cent of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalise banks.
He further said that GDP growth could be close to 6.5 percent for the fiscal year, although that is lower than the government's earlier estimate of about 7.3 percent. Growth slipped to its lowest level in three years in the first quarter, logging an annual rate of 5.7 percent.
Recently, President of the Federation of Indian Chambers of Commerce and Industry Pankaj Patel has called on the Reserve Bank of India (RBI) to reduce the price of money for Indian business by easing the fiscal deficit and inflation targets and allowing the rupee to depreciate against major currencies.