NEW DELHI (Reuters) - India can easily cut down its fiscal deficit without hurting people, if there is enough political will, a senior finance ministry official, in personal capacity, said on Tuesday.
Given the economic slowdown, high inflation and fiscal consolidation, “it is a difficult question, but if there is a political will, one can easily cut down by 1 percent of GDP without causing pain to people,” the finance ministry’s principal economic adviser said in a panel discussion, in her capacity as an economist.
She did not specify whether she was referring to a 1 percent of GDP decrease in the fiscal deficit or to subsidies.
Ila Patnaik also said there were enough leakages in schemes and excess subsidies to cut the country’s deficit, while replying in her private capacity to a question on fiscal consolidation.
India’s fiscal deficit during the 2013/14 fiscal year that ended in March was equivalent to 4.5 percent of the country’s gross domestic product, government data showed last month.
Reporting by Frank Jack Daniel; Writing by Malini Menon; Editing by Anand Basu