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'Fiscal deficit will be contained at 4.8 pct of GDP': Chidambaram

New Delhi, Jan 15 : Finance Minister P.  Chidambaram on Wednesday said that India's fiscal deficit will be contained at 4.8 percent of the Gross Domestic Product (GDP) in the current fiscal ending March, and hinted at possible cuts in government spending.

Chidambaram expressed his "unflinching commitment" to contain the fiscal deficit, at a time when the deficit in the first eight months of the fiscal year has touched 93.9 percent of the full-year target.
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"On more than one occasion, I have reiterated our unflinching commitment to contain the fiscal deficit to 4.8 per cent of GDP in the current year, and I'll do so again today.  We will then reduce it by 0.6 percent every year until we reach the target of 3 percent in 2016-17," he said at the valedictory function of the PETROTECH 2014 Conference here today.

He further said that the government's effort to contain the current account deficit (CAD) have yielded splendid results.

"Last year, we faced a daunting number of USD 88 billion.  Of the total imports of USD 491 billion, the oil import bill alone amounted to USD 164 billion.  Needless to say, a developing country like India cannot afford such a huge import bill or such a high level of CAD," he said.

"Therefore, we were constrained to take some hard measures, including conservation measures, and these measures have helped us contain the CAD.  I am glad to be able to say that the CAD in the current year will be approximately USD 50 billion," he added.

Chidambaram attributed the decline in growth to global factors, and said he was confident that Indian economy would soon recover and show high growth in next three years.

"It is true that there has been a slowdown in 2012-13 and in current year.  The slowdown reflects the world wide trend.  As global economy recovers and as new measures take effect, I am confident that Indian economy will also get back step by step to the high growth path in three years," he added.

He lauded the Ministry of Petroleum and Natural Gas and ONGC for organizing this event, and said PETROTECH plays a very crucial role in connecting energy strategists.

"This gathering brings together government leaders, policy makers, entrepreneurs, corporate leaders and professionals across the world on a common platform to further advance their cooperation in the energy sector through dialogue and discussion on issues that affect the energy industry," he said.

He also said that the global energy basket is changing radically on account of developments in the advanced economies as well as emerging economies.

"Energy is a key resource and the hydrocarbon sector has become the focus of all policy planners in every large country.  We need to discover and exploit our own energy resources.  We also need to secure energy supplies from abroad," he said.

"India has become one of the essential focal points of the oil and gas business in the Asia Pacific region.  Consequently, India is also fast becoming an important player in the global arena.  Initiatives taken by our oil companies, in recent years, have been quite impressive," he added.

Reaching out to the delegates from various oil producing countries, Chidambaram assured that India is a good long term bet as their partner for cooperation in the energy sector, while adding that the nation's foremost challenge is to bridge the energy deficit and to ensuring energy security.

"India will remain an energy deficit country for many more years.  The deficit has affected us in many ways. 24,147 MWs of power capacity is stranded for lack of gas.  Nearly 3.4 million tonnes of fertilizer cannot be produced for lack of gas," he added. (ANI)

 

Source: Top News



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