India’s fiscal deficit in the year through March 2013 may be narrower than estimated in the budget, the nation’s finance minister said.
“We have contained the fiscal deficit at 5.2 percent this year and when the actual numbers come, it may be slightly better,” Palaniappan Chidambaram said at a conference in New Delhi today. He targeted a gap of 4.8 percent of gross domestic product for 2013-2014 in the Feb. 28 budget, striving to preserve India’s investment-grade credit rating.
Chidambaram also increased spending on the poor to court support before elections, relying on higher tax receipts, asset sales and subsidy cuts to trim the widest deficit in major emerging nations. The budget has led to a mixed response: Moody’s Investors Service described it today as realistic and “credit positive,” while Credit Suisse Group AG said last week the plan’s revenue assumptions are “too high.”
The government will announce more measures to boost economic expansion, Chidambaram said at the conference with industrialists today, adding he plans to visit Japan, Canada and the U.S. in April and May to woo investors.
India is under pressure to lure capital inflows to fund a record current-account shortfall. Chidambaram reiterated that the imbalance in trade is more worrying than the fiscal gap.
The yield on the 8.15 percent note due June 2022 has climbed to 7.89 percent from 7.80 percent since Chidambaram presented the budget and unveiled record gross market borrowing of 6.29 trillion rupees ($115 billion).
Asia’s No. 3 economy expanded 4.5 percent in the three months to Dec. 31 from a year earlier, the weakest pace in almost four years, a report showed last week. Cooling investment, a drop in exports and government spending restraint this fiscal year sapped expansion.
The nation’s GDP will probably climb 6 percent in the year starting April 1 and 7 percent in 2014-2015, Chidambaram said separately in an online discussion hosted by Google India.
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