Mukherjee: Composed

Mumbai, Nov. 16: Finance minister Pranab Mukherjee has said he won’t be unduly concerned even if he slips on the fiscal deficit target of 4.6 per cent set out in this year’s budget by as much as a percentage point — a sign that the government may be ready to crank up its spending programme to deal with supply-side issues to curb runaway inflation.

“I admit that it is a very tough job to maintain the fiscal deficit target (at 4.6 per cent of GDP) but I am not going to change the number right now because I would like to watch the situation for a month or so,” Mukherjee told delegates at an international banking summit held here over a video link from Delhi.

He said the fiscal deficit should also be seen in the context of the economic growth of around 8 per cent, which is largely in line with what he had projected in his budget speech this year.

“I do hope that we will have around 8 per cent (growth) … keeping that in view and the overall international and economic situation, if there is a percentage point increase (in fiscal deficit) or a little less than that, it is not that bad,” he said.

On Tuesday, Kaushik Basu, chief economic adviser to the finance ministry, had said it would be hard to meet the fiscal deficit target of 4.6 per cent. He said the government was planning to get as close to that number as possible.

Mukherjee said the country must sustain the momentum of expansion in domestic banking services, even as the global growth was weak.