The government is confident that fiscal deficit for FY13 will be below 5.3 percent. Sources in the Finance Ministry told CNBC-TV18 that deficit will be close to 5.2 percent. Government has also slashed spending by 12,000 crore rupees to rein in the deficit. CNBC-TV18’s Aakansha Sethi reports.
This story was reported in November itself that the government is not likely to go in for any additional borrowing. If the fiscal deficit had been 5.3 percent it would have meant an additional borrowing of Rs 20,000 crore.
However, because of the comfortable cash balance not only is the government not going to borrow extra but it also has cut its borrowing by Rs 12,000 crore for the week February 22. This means that fiscal deficit is going to be around 5.2 percent. Tomorrow bond prices are expected to go up, since, there is going to be a high demand in the bond market.
Also, the government is looking at a strong fiscal consolidation plan not only for this year but for the next fiscal as well. This comes as the strongest indication of the fact that government intends to stick to the fiscal deficit target.