- Weather
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Max |
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40°C |
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Min |
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30°C |
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Sunrise |
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05 : 30 AM |
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Sunset |
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06 : 30 PM |
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Humidity |
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50 to 80 per cent |
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- Prayer Time
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Fajar |
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04:02 am |
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Dhuhr |
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12:08 pm |
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Asar |
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03:31 pm |
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Magrib |
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06:46 pm |
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Isha |
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08:04 pm |
- Oil Price
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- Gold Price
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Price in RO
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24ct / gm |
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17.99 |
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22ct / gm |
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17.55 |
- Currency Rates
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Forex Rates vs R01
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US Dollar |
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2.59 |
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Euro |
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2.02 |
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Pound |
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1.71 |
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Indian Rs. |
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142.40 |
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Pak Rs. |
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255.91 |
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Bangla Taka |
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201.79 |
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P. Chidambaram with the economic survey 2012-13 report in New Delhi, yesterday. The federal finance minister pledged to pare the fiscal gap to 4.8 per cent of GDP in 2013-2014, from 5.3 per cent this fiscal year. Photo - Reuters
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New Delhi: India will probably contain the budget deficit at about 5.3 per cent of gross domestic product this fiscal year as it tries to slow inflation, and economic growth is set to recover, the Finance Ministry advisers said.
"The government is committed to fiscal consolidation," they said in a report in New Delhi yesterday, predicting GDP will rise as much as 6.7 per cent in the year through March 2014.
Deficit curbs, along with "demand compression and augmented agricultural production should lead to lower inflation, giving the RBI the requisite flexibility to reduce policy rates," they said.
Finance minister Palaniappan Chidambaram, who presents the budget today, faces the task of narrowing the widest fiscal gap in major emerging nations to avert a credit-rating downgrade.
The Reserve Bank of India has signaled government spending has added to inflation risks, limiting the extent of interest-rate cuts as the economy falters.
"The government has little option but to aggressively push for fiscal cuts to give the right signals to rating agencies," Indranil Pan, an economist at Kotak Mahindra Bank, said before the report. "Slower economic growth and higher subsidies, however, will make it challenging to deliver on the promises in an election year."
The rupee, which has weakened about 8.4 per cent versus the dollar in the past year, gained 0.6 per cent to 53.795 in Mumbai. The BSE India Sensitive Index of stocks rose 0.8 per cent. The yield on the 8.15 per cent note maturing June 2022 declined to 7.81 per cent from 7.82 per cent.
Gross domestic product may rise 6.1 per cent to 6.7 per cent in the year through March 2014, from an estimated 5 per cent in 2012-2013, the survey said. The expansion in the current fiscal year would be the slowest since 2002-2003. The survey of the economy is prepared by a panel headed by Raghuram Rajan, chief economic adviser in the Finance Ministry. Chidambaram may curb spending growth in the budget today to help damp inflation of almost 7 per cent and boost the central bank's scope to reduce borrowing costs. He has pledged to pare the fiscal gap to 4.8 per cent of GDP in 2013-2014, from 5.3 per cent this year.
The Reserve Bank lowered the benchmark repurchase rate to 7.75 per cent from 8 per cent last month, the first reduction since April 2012. Reserve Bank of India governor Duvvuri Subbarao said on February 16 that "there is room for monetary easing, but that room is limited."
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