Fiscal deficit narrows to 4.5%

A sharp fall in plan expendiure has helped pull India's fiscal deficit for last financial year below the government's estimate, but the cut in spending on productive activities has left an impact on the economy.
The deficit, or the shortfall in the government's revenue to meet expenses, narrowed to 4.5% of gross domestic product in the year ended on March 31, compared with 4.9% initially estimated in the 2013-14 budget and the revised 4.6% given out with the interim budget for 2014-15 in February.
Private analysts have called for a more sustainable plan to cut the budget gap, even as they cited curtailment of plan expenditure as the main factor that helped keep the deficit down in spite of the lower-than-targeted tax revenues.

Former Finance Minister P Chidambaram had pegged fiscal deficit for 2014-15 at 4.1% of GDP in the interim budget, in line with the fiscal consolidation plan unveiled in 2012-13 after he took charge of the finance ministry.
The Confederation of Indian Industry (CII) said a road map for adhering to the fiscal deficit target should be drawn up and announced in the Budget, expected to be presented in July.