Will meet all fiscal targets, jaitley says after review

NEWDELHI: A day after announcing measures to boost short-term capital inflows to rein in the rupee’s decline and curb a widening current account deficit, the government said on Saturday that it would stick to its fiscal deficit and capital spending targets in a signal of its continued commitment to financial prudence in a pre-election year.

Finance minister Arun Jaitley, after a review meeting of all departments under his ministry chaired by PM Narendra Modi, said the fiscal deficit would be contained at the targeted 3.3% of gross domestic product.

Rising oil prices, which have caused petrol and diesel prices at the pump to rise to records, and the declining rupee, which has depreciated around 13% against the dollar since January 1, making it Asia’s worst-performing currency, are putting finances under strain. Rising oil prices and higher interest rates may mean that the fiscal deficit target will be missed, rating company Moody’s Investors Service said this month.

“Government is confident of meeting the 3.3% fiscal deficit target,” Jaitley said after the review meeting. “The government had spent 44% of the budgeted capital expenditure till 31 August and there will be no cuts in capex by the end of this year.”

Briefing reporters after the meeting Jaitley said after the presentations made by secretaries of the departments of economic affairs, revenue, expenditure and disinvestment, Prime Minister Modi expressed satisfaction on various aspects of the economy.

On Friday, Jaitley announced five measures aimed at increasing the inflow and stemming the outflow of dollars, including two that pertain to external currency borrowings.