Fiscal deficit at 4.1 per cent depends on subsidy control: Rangarajan

New Delhi: Former PMEAC Chairman C Rangarajan on July 10 said containing the fiscal deficit at 4.1 per cent of GDP during the current fiscal as proposed by the new NDA government will depend on its ability to control subsidies. "The re-iteration of fiscal consolidation is welcome but whether he will be able to contain it (fiscal deficit) to 4.1 per cent is to be seen. Much will depend on the subsidies.. if they are able to control the subsidies. Certainly, there are certain incentives for savings," former PMEAC Chairman C Rangarajan said.

Outlining the roadmap for fiscal consolidation, Finance Minister Arun Jaitley on July 10 said the government will retain the fiscal deficit target for 2014-15 at 4.1 per cent of GDP and reduce it further to 3 per cent by 2016-17. Presenting his maiden Budget, the Minister said the prevailing economic situation presents a great challenge and there was a need to introduce fiscal prudence that will lead to fiscal consolidation and discipline.