Outlining the roadmap for fiscal consolidation, Finance Minister Arun Jaitley on Thursday said the Government will retain the fiscal deficit target for 2014-15 at 4.1 per cent of GDP and reduce it further to 3 per cent by 2016-17.
Presenting his maiden Budget, the Minister said the prevailing economic situation presents a great challenge and there was a need to introduce fiscal prudence that will lead to fiscal consolidation and discipline.
“My predecessor (P Chidambaram) had set up a very difficult task of reducing the fiscal deficit to 4.1 per cent of GDP in current year... The target in indeed daunting.
“Difficult as it may appear, I have decide to accept this target as a challenge,” he said.
Outlining the roadmap for fiscal consolidation, Jaitley said fiscal deficit would be brought down to 3.6 per cent in 2015-16 and 3 per cent by 2016-17.
The fiscal deficit which had touched a high of 5.7 per cent in 2011-12, was brought down to 4.8 per cent in 2012-13 and further to 4.5 per cent in 2013-14.
The reduction in fiscal deficit by the UPA government, he said, was mainly achieved by a reduction in expenditure rather than by way of realisation of higher revenues.