Meeting fiscal deficit target will be 'tough', says Rajan

India's economy will show signs of improvement in the second half of the year, but achieving the full year fiscal deficit target of 5.3 percent of gross domestic product will remain a tough ask, Chief Economic Advisor to the Finance Ministry Raghuram Rajan said on Monday.

India lowered its official growth forecast to between 5.7 and 5.9 percent for this fiscal year, the finance ministry's mid-year economic review said on Monday, but said it was on track to meet a fiscal deficit target of 5.3 percent.
Addressing a news conference, Rajan also said inflationary pressures were expected to ease in the second half of the year, while industrial output was expected to improve. He expects GDP growth in the second half of the year to be around 6 percent.
In its mid-year economic review, the government said uncertainty over stake sales in state-run companies and soaring subsidies pose a challenge to reducing the fiscal deficit, which has put in peril the country's investment grade credit rating. Also read: Govt lowers growth forecast, says on track for deficit