New Delhi: Reiterating commitment to stick to the fiscal consolidation road map, the government on Tuesday said it will continue with subsidy reforms and bring down the fiscal deficit to 3.5 percent of the GDP by March 2017.
"Government is committed to progressively pursuing subsidy reforms," Minister of State for Finance Jayant Sinha said in a written reply to the Rajya Sabha.
As per the fiscal consolidation road map of the government, fiscal deficit is to be brought down to 3.9 percent of GDP in 2015-16 and further to 3.5 percent in 2016-17. The deficit was 4.1 percent in previous fiscal.
"Government is firmly committed to the path of fiscal consolidation. Fiscal consolidation over medium term has been designed with the judicious mix of reduction in total expenditure as percentage of GDP and improvement in gross tax revenue as percentage of GDP," Sinha said.
He said while both petrol and diesel prices have been deregulated, the government has launched a direct benefit transfer scheme for LPG subsidy from January 2015 to avoid duplication and prevent leakages.
In a reply to a separate question, Sinha said requests have been received from states for permission to borrow in relaxation of the Fiscal Responsibility and Budget Management (FRBM) norms.
He said action is being taken within the parameters laid down by the Finance Commission.
