'Corrective steps will contain fiscal deficit close to target'

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Namrata Kath Hazarika | 12 Sep, 2012
The government has geared up to control fiscal deficit and and a selw of measures would ensure that it would remain somewhere near the targeted 5.1 percent for this fiscal, said Department of Economic Affairs Secretary, Arvind Mayaram in New Delhi, on Tuesday.

"We intend to take steps to correct the fiscal deficit, it will not happen in one day. Correction of fiscal deficit would also mean hardship and that hardship will have to be across the board," he said at FICCI's National Executive Committee Meeting.

"This year fiscal deficit is 5.6 percent as of now but the budget has targeted 5.1 percent. I am not very sure whether we will be able to reach 5.1 percent but I can assure you that the government is fully seized to be somewhere around it and for that whatever measures have to be taken, will be taken," he added further.

Mayaram also said Finance Minister P Chidambaram will encourage public sector undertakings in a meeting on Wednesday to go ahead with their investment plans.

The government will promote investment as well as growth which have dipped to nine-year low of 6.5% in 2011-12, he added.

"We will have to correct fiscal deficit and we will also have to restore the growth impulse," he said.

He also disclosed that nine major public sector undertakings (PSUs) having large cash reserves would start investing in infrastructure projects in a time-bound manner to boost growth in the country.

"The identified PSUs are sitting on cash reserves of Rs.1.8 lakh crore. The identified projects will soon be posed to the union Cabinet for time-bound implementation of the projects," Mayaram said.

Among other plans, Mayaram said the government would make a series of interventions to trigger growth in the economy like bringing on stream road and petroleum sector projects of Rs.1,000 crore or more.

In the next three months, a PPP (public-private partnership) framework will be put in place for creating warehousing facilities for food grains, entailing an investment of Rs.20,000 crore.

The DEA secretary said the government was aware of the lack of credit and that it was committed to ensuring early financial closure of large private sector companies.

"A slew of decisions have already been announced to ease external commercial borrowings and borrowings for Indian companies abroad would be made easier for retiring domestic loans," he added.