Montek Singh Ahluwalia, Planning Commission Deputy Chairman on December 07 said India''s fiscal deficit for the current fiscal will be higher than budgeted for but this will not be an unfavorable development in the perspective of the global meltdown.
Higher fiscal deficit will be a desirable development, Ahluwalia said at a press conference here, soon after unveiling a growth stimulus package that includes a four percent cut in central value added tax (VAT).According to Finance Secretary Arun Ramanathan, the impact of the four percent cut in central VAT would be Rs 8,700 crore (Rs.87 billion/$1.75 billion).
A slowdown in tax receipts and the measures unveiled on December 07 are also expected to impact on the fiscal deficit, which was budgeted at 2.5 percent of gross domestic product for 2008-09 - 30 basis points lower than the 2.8 percent in the previous year. Aditionally, the government will also seek parliament''s approval for plan expenditure of another Rs.20,000 crore (Rs 200 billion/$4 billion) in the remaining four months of the fiscal.
Higher fiscal deficit will be a desirable development, Ahluwalia said at a press conference here, soon after unveiling a growth stimulus package that includes a four percent cut in central value added tax (VAT).According to Finance Secretary Arun Ramanathan, the impact of the four percent cut in central VAT would be Rs 8,700 crore (Rs.87 billion/$1.75 billion).
A slowdown in tax receipts and the measures unveiled on December 07 are also expected to impact on the fiscal deficit, which was budgeted at 2.5 percent of gross domestic product for 2008-09 - 30 basis points lower than the 2.8 percent in the previous year. Aditionally, the government will also seek parliament''s approval for plan expenditure of another Rs.20,000 crore (Rs 200 billion/$4 billion) in the remaining four months of the fiscal.
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