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Budget gap to be lower than estimated at 4.9% of GDP.

Summary: NEW DELHI: India's budget deficit last fiscal year was narrower than estimated, aiding the nation's ...

NEW DELHI : India's budget deficit last fiscal year was narrower than estimated, aiding the nation's efforts to preserve its investment-grade credit rating, according to two Finance Ministry officials with direct knowledge of the data. The gap was 4.9 per cent of gross domestic product in the 12 months ended March, less than the 5.2 per cent estimated by Finance Minister Palanaippan Chidambaram in the February 28 budget speech, said the officials, asking not to be identified before the official release of the figures later today. Higher than anticipated non-tax revenues and expenditure curbs led to the narrower shortfall, both the officials said. The government pared the deficit to help damp inflation and increase scope for interest-rate cuts to revive growth. A report today showed economic expansion slowed to five per cent in 2012-2013, the weakest pace in a decade. The lower deficit "is a positive development and I hope the rating agencies and markets will take a note of it," said Arun Singh, an economist at Dun & Bradstreet Information Services India. "As much as this development is welcome, the critical thing is the government still needs to improve the quality of its expenditure and cut down on subsidies."

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Publication:Times of Oman (Muscat, Oman)
Date:Jun 1, 2013
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