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Fiscal deficit to be brought down to 3 per cent by 2006: Sinha

Finance Minister Yashwant Sinha, on Wednesday, expressed confidence in bringing down the fiscal deficit to three per cent of GDP over the next five years while setting an ambitious 8-9 per cent growth rate for this decade.

"The deficit was being targeted to be lowered to 4.7 per cent in the current fiscal and subsequently brought down to around three per cent over the next five years," Sinha said at an investors meet in Hong Kong.

In order to achieve this, he said the government has introduced a Fiscal Responsibility and Financial Management Bill in Parliament, which would address the issue of government spending beyond its means.

Emphasising that fiscal reforms were part of the overall growth strategy, Sinha said the 6.5 per cent growth in GDP in the last decade was a "good accomplishment".

"In order to overcome the problem of unemployment and poverty within country, a growth rate of 8-9 per cent will be targeted for the first decade of the new millennium," he said.

Pointing out that India embarked upon the path of liberalisation only in the 1990s, he said that it was "little unfair" to compare India with some of the other nations who had stolen the march over India in initiating the reform effort.

On interest rates, Sinha said rates were slowly being brought down to peg them more at the international level in order to bring the financial market in India in synergy with the world's other dominant markets.

"In the last three years, interest rates had been brought down by almost 350 basis points," he said.

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