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Wednesday, Dec 04, 2002

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`Mounting fiscal deficit a worry'

Our Bureau

The Finance Secretary, Dr S. Narayan, with the Chief Economic Advisor, Dr Ashok Kumar Lahiri, addressing a press conference in the Capital on Tuesday.


THE Government has expressed concern over the mounting fiscal deficit calling it the biggest challenge to the economy, which was facing the prospects of weakening growth momentum and pressures on revenue and expenditure.

Addressing a press conference on Tuesday, on the Mid-Year Economic Review tabled in Parliament, the Finance Secretary, Dr S. Narayan, said, "Fiscal deficit will be the biggest challenge for the economy in the coming months. Not only the fiscal deficit of the Centre, we also have to devise ways for tackling the problem of deficits in States."

Barring this all other economic fundamentals were satisfactory compared to last several years and "we need to capitalise on these to convert opportunities into investment," Dr Narayan said.

He, however, did not venture a guess on the level of slippage from the budgetary target of fiscal deficit at 5.3 per cent or shortfall in revenue collection saying it was a bit too early to predict. "Till we have revenue collection figures up to December 15, we will not be in any position to guess," he added.

The review, forecasting an economic growth of 5-5.5 per cent for the current fiscal, however, states that fiscal deficit during the first half of the year was just marginally higher than the corresponding period of previous year. "This is in accordance with the projections in the budget but the mounting deficit was still a major concern," he said.

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