Economic Survey 2011: Any aggressive move to reduce deficit will hit growth, says FICCI

NEW DELHI: With the fiscal deficit for the current fiscal projected to fall to 4.8 per cent, industry body Ficci today warned the government that any "aggressive" move to reduce fiscal deficit would impact growth and employment generation.

Finance Minister Pranab Mukherjee had in the last Budget pegged the fiscal deficit, which is the difference between total expenditure and revenue, for 2010-11 at 5.5 per cent of the GDP.

"We find the Economic Survey 2010-11 very encouraging, but any aggressive move to reduce fiscal deficit will impact growth and employment generation," Ficci Secretary General Amit Mitra said.

The pre-Budget report card of the economy by the Finance Ministry pegged the fiscal deficit for the current fiscal at 4.8 per cent, against the budgeted 5.5 per cent.

Mitra said the chamber is not against reducing fiscal deficit, but it should not be done "aggressively".

He also said that two things in the survey - the focus on innovation and skill development -- was encouraging.

"We hope to see something concrete in the forthcoming Budget for innovation and skill development, which is important for the country's economy growth," Mitra added.