Despite the 2G spectrum auction setback, finance minister P Chidambaram on Friday expressed confidence that the Centre would be able to meet the revised fiscal deficit target of 5.3% of GDP in 2012-13.
“We still have good time of four-and-half months and therefore it is too early to say that we won't reach the target. And it is my intention to reach the target. I don't think we should spread pessimism or cynicism,” he said, adding that the PSU disinvestment process will begin shortly and the spectrum auction will continue.
The 2G spectrum auction fetched a mere R9407.64 crore against the lowered target of R30,000 crore — it was R40,000 crore earlier.
Though the government plans to raise R30,000 crore this fiscal through disinvestment, so far no PSU has hit the market. Chidambaram said the Empowered Group of Ministers would meet soon to take decisions on the pending issues. India's sovereign credit rating could be downgraded to junk by the global rating agencies if the government is unable to rein in its fiscal deficit.
Though the economy was “challenged”, the government was taking a number of steps to revive the economic growth and end the year on a reasonably satisfactory note, Chidambaram said.
“Only this morning you have read that Eurozone is formally in recession. We are nowhere near that situation," the minister added.
Noting that the Indian economy was continuing to grow at 5.5%, he said, and hoped, for “a pick up in the third and fourth quarters."
In the first quarter, the growth rate was 5.5% and the second quarter figure will be released by this month-end.
The finance minister also said he would try to present a "more balanced budget" for 2013-14.