Maintaining fiscal deficit target extremely important: Montek

Planning Commission deputy chairman Montek Singh Ahluwalia today said restricting the fiscal deficit at targeted levels is "extremely important" for the economy.

"We have said ourselves in the Plan, I think we should be very clear about that balancing deficit doesn't mean zero fiscal deficit. But maintaining a target deficit that's extremely important for the health of the economy," Mr Ahluwalia told reporters on the sidelines of a meeting with State Planning Commission/Boards.

He further said maintaining fiscal deficit at the targeted level is true for all the economies across the globe and the country wants to have a planning that is consistent with fiscal responsibility.

"I think that is true in all the countries, everywhere people are looking at that and we ourselves want to do a kind of planning which is consistent with fiscal responsibility, that is not a problem," he said.

Finance Minister P Chidambaram in December said that some tough decisions taken by the government were necessary to bring down the fiscal deficit and it was important to augment resources and control expenditure.

To control the fiscal deficit and cap the rising subsidy burden, the government in the recent past has partially decontrolled diesel prices besides capping the number of subsidised cooking gas cylinder to nine per year per household.

The government has revised upwards the fiscal deficit target for 2012-13 to 5.3 per cent of the GDP from the 5.1 per cent earlier because of increasing expenditure and lower-than-estimated revenue realisation.

In reply to a question whether the government is planning to prune the planned expenditure in the next Budget, he said, "You know these are decisions, these are discussions going on. I don't want to comment on many things until after Budget."