New Delhi : The government’s achieving the 3 percent fiscal deficit target by 2017-18 is a challenge, Finance Minister Arun Jaitley said on Friday.
“I am glad we have achieved the 4.1 percent fiscal deficit target of last year. The journey to 3 percent has various challenges,” he said replying to a question in Lok Sabha.
Among the challenges to achieving the fiscal deficit target was the forthcoming report of the Pay Commission as well as the additional 10 percent fund devolution to states from the divisible pool of central taxes as recommended by the Finance Commission and accepted by the Centre.
According to the finance minister, another challenge was to “prime up the economy and push growth” for which he has targeted investment of Rs.70,000 crore in infrastructure in the current fiscal.
“Besides the area of infrastructure, any additional resource that I would have I tend to concentrate on irrigation,” Jaitley said.
In his first full budget presented in February, Jaitley had extended the target deadline for controlling fiscal deficit to three percent, reasoning that insistence on a time table to contain the deficit would harm growth prospects.
The targets for the next three years have been set at 3.9 percent for 2015-16, 3.5 percent for 2016-17, and 3.0 percent for 2017-18.
He said the challenge for any finance minister is to balance growth and control of the fiscal deficit.
“If fiscal discipline is established over the next 2-3 years, fiscal deficit will be better,” he said.