Government hopeful of sticking to 3.2% fiscal deficit target: Subhash Chandra Garg

NEW DELHI: The government is hopeful of sticking to the 3.2 per cent fiscal deficit target for the current fiscal, although a final view would be taken in December, Economic Affairs Secretary Subhash Chandra Garg said today.

With core sector industries growing at a six-month high pace of 5.2 per cent in September, Garg said the data points to manufacturing pick up and should get reflected in the overall Index of Industrial Production (IIP) data for the month.

Talking to reporters, Garg exuded confidence that the GDP data for July-September quarter would be significantly better than the 5.7 per cent clocked in April-June period.

"It will be significantly (better) by all indicators. You have seen exports going up significantly, commercial vehicles, IIP... everything logically, should result in a substantial improvement," he said.

As per official data released today, the fiscal deficit, which is the difference between government expenditure and revenues, in the April-September touched 91.3 per cent of the budget estimate.

Explaining the number, Garg said it shows while expenditure is high, revenue growth is also matching up.

"We will see more of revenue growth in the coming months. Hopefully, the fiscal deficit target which we have for the year we should be able to maintain, but we will take a view in December," he said.

The government has budgeted to contain fiscal deficit to 3.2 per cent of the GDP in current fiscal, lower than 3.5 per cent last fiscal.

Fiscal deficit is a major constituent taking into account by international rating agencies while assigning sovereign ratings.

Core sector data for September at 6-month high shows that manufacturing is picking up. "40 per cent is the weight of core sector in IIP. So all these point out that the September numbers when they come will be very very good," Garg said.