CAD more worrisome than fiscal deficit: Chidambaram

Finance minister P Chidambaram today vowed that the government would limit the fiscal deficit for 2013-14 to below 4.8 per cent of the gross domestic product (GDP).

Speaking at the Economist India Summit conference organised by The Economist magazine in New Delhi, Chidambaram said this fiscal deficit target is a red line that would never be breached.

Government figures suggest that the fiscal deficit for the recently-ended 2012-13 is expected to be at around 5 per cent of GDP.

Chidambaram said the current account deficit (CAD) situation is at present more worrying than fiscal deficit. The minister expects CAD to be below 5 per cent in 2012-13.

Chidambaram said given the weak growth projections for the world economy, it may be difficult to dramatically increase exports and India may have to look at ways to restrict imports.

He dismissed fears about India's deficit being mainly financed by volatile short-term foreign institutional investor inflows. Chidambaram said foreign institutional investments in India have always seen a growth except for one year after the global financial crisis. ''The FIIs have invested about $11 billion into India year-to-date,'' he pointed out. 

He expects India's growth to be better than most of its BRICS developing nation peers.

Saying that the United Progressive Alliance government was committed to carry forward economic reforms during the remainder of its term, Chidambaram promised more executive actions in the next two to four months.

He sought the cooperation of the Bharatiya Janata Party, the main opposition party, to pass important bills in parliament.

"There is much more to be done. The remaining bills have to be passed. There are many more executive actions that have to be taken ... some of these are executive actions which we will take in the next 2-4 months," the finance minister said.