Economy | Mon Dec 17, 2012 3:18pm IST

Meeting fiscal deficit target will be 'tough': Rajan

NEW DELHI (Reuters) - India's economy will show signs of improvement in the second half of the year, but achieving the full year fiscal deficit target of 5.3 percent of gross domestic product will remain a tough ask, Chief Economic Advisor to the Finance Ministry Raghuram Rajan said on Monday.

In its mid-year economic review, the government said uncertainty over stake sales in state-run companies and soaring subsidies pose a challenge to reducing the fiscal deficit, which has put in peril the country's investment grade credit rating.

Addressing a news conference, Rajan also said inflationary pressures were expected to ease in the second half of the year, while industrial output was expected to improve. He expects GDP growth in the second half of the year to be around 6 percent.

(Reporting by Arup Roychoudhury; Editing by Anand Basu)

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