Home > Business & Investment > High fiscal deficit a concern, but PM is confident

High fiscal deficit a concern, but PM is confident

Monday, January 10, 2011

Economic expansion and high fiscal deficit are together leading to unstable price regime and the government needs to revert to fiscal consolidation to control the situation, Finance Minister Pranab Mukherjee said on Saturday.

"Economic expansion leads to fiscal deficit. It is leading to the problem of unstable price regime," Mukherjee told the 9th Pravasi Bharatiya Divas in New Delhi, as India's annual food inflation climbed to a 52-week high at 18.32 percent, reports IANS.

The minister said the sharp rise in global commodity prices was complicating the problem further in the domestic market and assured that every step will be taken to tame this spike.

"It is a big problem. We will have to come to the path of fiscal consolidation. We have to take all necessary measures to bring the inflation to a moderate level," Mukherjee said, adding a 3 percent growth gives a $41 billion-plus stimulus to the economy.

"High economic growth has its own reaction. It is resulting in a huge fiscal expansion and that is creating the problem of price rise," he said, and predicted a 9-10 percent annual growth soon on the back of prudent policy. According to him "Strong fundamentals, prudent policy and calibrated reforms have helped to bring the growth pre-crisis level.

However Prime Minister Manmohan Singh was optimistic and said the Indian economy would record 8.5 per cent growth during the current fiscal and is expected to grow at the rate of 9 to 10 per cent from the next financial year despite the "uncertain" global scenario.

Addressing the same conference he said high growth rate was vital to fund ambitious social development schemes. "Despite the uncertain global economic scenario, I am happy that our economic recovery is progressing well," Singh told the congregation of about 1,500 members of the Indian diasporas who have converged here from across the world for the three-day annual event. "In the last two quarters, our growth rate has been 8.9 per cent and we expect that for the entire year, it will be around 8.

Facebook   Delicious   Delicious   submit to reddit reddit
No Comments Posted
- Advertising -
City news
Dadar ticket checking staff given to brutally ass
Cannot ascertain cause of fire at Dadar Flower ...
The continuous supply of yellowish drinking water
Puberty and adolescence
Dr. Rajan B. Bhonsle, M.D. (Bom)
Consulting Sex Therapist & Counsellor
Dr. (Mrs.) Minnu R. Bhonsle, Ph.D.
Consulting Psychotherapist & Counsellor
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)Work is under control and you will consolidate your position. Financial security is achieved and you can invest money in fresh ventures. You will have a pleasant day full of happenings, communication, meeting new people and facing new situations. You will be feeling much more positive about your current state of affairs.
Tarot for Love
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)What the cards say: Success and new romantic opportunities come your way Path: Excellent week! You will get what you want so be kind to the less fortunate. Don’t be arrogant or too demanding Ally: You will not need any help, but Libra will balance you. Avoid Leo or Sagittarius Card for the week: Tarot key XIX The Sun will bring brightness in all that you do. You will dazzle others and win accolades
- Advertising -
Is there something you’ve always wanted to do in
I am 20-yr-old, pursuing my BA in political scien
I am a Commerce graduate and would like to pursue
Read More