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(File photo) Prime Minister Manmohan Singh - PTI.
The government on Monday announced austerity measures, including a ban on official meetings in five-star hotels and restrictions on foreign travel, as it tries to meet its fiscal deficit target.
India, under threat from a slowing economy and a rising subsidy bill, aims to narrow its fiscal deficit to 4.6 percent of GDP in the current fiscal year from 4.7 percent a year ago.
The government has been banking on strong economic growth to help meet its deficit target. But a spike in global oil prices and worries over a slowdown in Asia's third-largest economy could upset the fiscal calculations.
"In view of the commitment of the government to carry on the process of fiscal consolidation vigorously and to meet the fiscal and revenue deficit targets announced in the budget 2011-12, there is a need for economy and rationalisation of expenditure," the finance ministry said in a memorandum.
New Delhi has budgeted spending 1.34 trillion rupees ($30.1 billion) on major subsidies, including fuel and fertilizer in the current fiscal year to end-March 2012. With oil prices showing little sign of moderation, the total spending is expected to be much higher than budgeted levels.
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