<div><div>India will move to cut its fiscal deficit to 3 per cent of GDP by March 2017, the finance minister said, as the government tackles its ballooning expenditure to prevent the country's credit rating being downgraded to junk.</div><div> </div><div>After years of policy inertia that hit investments and slowed economic growth to a near three-year low, the Congress party-led ruling coalition is pushing ahead with key reforms to stimulate sluggish growth.</div><div> </div><div>"As fiscal consolidation and investors' confidence increases it is expected that the economy will return to the path of high investment, higher growth, lower inflation and long-term sustainability," Finance Minister P. Chidambaram told a news conference in New Delhi on 29 October.</div><div> </div><div>Chidambaram's comments came a day ahead of the Reserve Bank of India's (RBI) quarterly policy review. The central bank, which is not expected to cut rates on 30 October, has previously called for fiscal consolidation measures from the government. The central bank's governor, Duvvuri Subbarao, met with Chidambaram on Friday.</div><div> </div><div>India's fiscal deficit widened to 5.8 per cent of GDP last year from 3.5 per cent in 2007-08, and could hit 6.1 per cent this fiscal year that ends in March, according to a government panel report last month.</div><div> </div><div>The International Monetary Fund sharply cut its economic growth forecast for India for 2012 this month to 4.9 per cent from 6.1 per cent previously. Rating agency Standard & Poors said this month the country faces a one-in-three chance of a credit rating downgrade to junk over the next two years.</div><div> </div><div>Chidambaram said the government is targetting a fiscal deficit of 5.3 per cent of GDP for the current fiscal year ending in March.</div><div> </div><div>The deficit would be brought down through rationalised and strict control of expenditure, he said, without harming flagship poverty relief programmes.</div><div> </div><div>The move comes after a government panel last month warned that the country was teetering on a "fiscal precipice" and must slash large subsidies in order to get its ballooning fiscal deficit under control.</div></div><div> </div><div><strong>Chidambaram Speak:</strong></div><div><div>-Government expecting current account deficit of $70.3 billion (approx Rs 3,65,560 lakh crore) or 3.7 per cent of GDP in 2012-13</div><div>-Government accepts recommendations of Kelkar Committee on fiscal consolidation; fiscal deficit to be 5.3% in 2012-13</div><div>-Fiscal consolidation will help in moving to a regime of low inflation and high growth</div><div>-I am reviewing Direct Taxes Code (DTC), it will be introduced in Parliament; meeting on GST on Nov 8</div></div><div>-We are confident of raising Rs 30,000 crore from disinvestment in current fiscal</div><div> </div><div><em>(Agencies)</em></div>
