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Sinha puts fiscal deficit at 5 pc of GDP in medium term

India's gross fiscal deficit will be five per cent of gross domestic product in the medium term, Finance Minister Yashwant Sinha said in a newspaper interview.

"A reasonable medium-term target would be to bring down the gross fiscal deficit to five per cent of the GDP," Sinha told a financial daily.

The finance minister also opined that the insurance sector reforms should be speeded up.

"Insurance sector reforms must be expedited not only to expand the insurance services to the people of India but also to augment availability of long-term funds for infrastructure sectors," he said.

He said the gross fiscal deficit, which includes central and state government deficits and public sector units' losses, was about eight per cent of GDP in 1998/99 (April-March).

The government would sell assets of state-run firms, control wasteful expenditure and raise resources through cost recovery policies, he disclosed.

"The government's strategy towards public sector enterprises should combine a judicious mix of strengthening strategic units, privatising non-strategic ones through gradual disinvestment or strategic sales and devising viable rehabilitation strategies for weak units," he said.

The central government is seeking to keep its fiscal deficit at 4 per cent of GDP in 1999/2000 compared to 4.5 per cent the previous year.

Compiled from media reports

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