RPT-UPDATE 1-India to meet deficit target despite drought woes

(Repeats story issued late on Monday)

* Higher revenues to offset drought relief expenses, subsidy * Plan panel to review economy on Sept 1 (Adds, details, background)

NEW DELHI, Aug 24 (Reuters) - India's fiscal deficit is unlikely to widen further this year, a top policy adviser said on Monday, even as the government spending on food imports and drought relief is expected to rise following a poor monsoon.

In July, the government projected the fiscal deficit for 2009/10 (April-March) to be 6.8 percent of the gross domestic product (GDP), a 16-year high, to be funded by a record high market borrowing of 4.51 trillion rupees ($93 billion).

However, rain deficit in the June-September monsoon season, is feared to impact crops including rice and sugar and has already sent food prices higher by over 10 percent from the previous year.

"I don't think there is any reason to think that the 6.8 percent will be crossed," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, told reporters.

Farm Minister Sharad Pawar said food subsidy would top 600 billion rupees this year, about 15 percent higher than what was estimated last month.

Economists estimate India's drought relief measures could push up fiscal deficit by $4 billion, or 0.5 percentage points. See [ID:nBOM428689]

In 2002/03, the last major drought year, the federal government's fiscal deficit came in at 5.9 percent of GDP, higher than the budget estimate of 5.3 percent.