Fiscal deficit not as high as other countries: Montek Singh

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

The Economic Survey released yesterday called for sweeping reforms and set out a disinvestment target of generating Rs 25,000 crore per year. Commenting on the same Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, said, "I don't think that the survey is saying anything different from what was contained in the President's address."  He said that over the medium-term, issues like disinvestment would already be a declared policy. "I am glad that the survey is emphasising it." He hoped India would soon have a medium-term program for disinvestment. But was quick to add that government equity will remain at 51%.

Ahluwalia further said that tax reforms were an extremely important part of the agenda. "The president's address had mentioned it and the fact that the survey has also mentioned it is strengthening a message already given."

Commenting on the rising fiscal deficit, Ahluwalia said he could guarantee that India's deficit would not be as high as it is in some other countries. "My point really was that countries all over the world are using the fiscal deficit instrument in order to give stimulus. If ours is much above what we earlier on used to call normal I don't think we should be very surprised about that."

On interest rates Montek said, "I would expect that with inflation being low there is no case for interest rates rising. I think people are concerned whether this fiscal deficit is permanent feature, it certainly isn't. It maybe high this year but we will bring it down."