The Indian government will make all efforts to restrict fiscal deficit to 5.3 percent of gross domestic product (GDP) for the current fiscal, Prime Minister's Economic Advisory Council (PMEAC) Chairman and retired Reserve Bank of India (RBI) governor C. Rangarajan said.

On the sidelines of an event organized by Export-Import Bank of India in New Delhi, he said, "I think our attempt will be to see that we remain as close as possible to revised fiscal deficit that has been indicated by the finance ministry. All efforts will be made to get to that number."

Though the government had pegged fiscal deficit for the current fiscal year at 5.1 percent of GDP in the budget, it has revised the target to 5.3 percent, owing to subdued revenue collection and rising fuel and food subsidy bills.

The PMEAC chief's comments come in the backdrop of lukewarm response to the 2G spectrum auction which could fetch the government only Rs.9,407 crore, compared to the target of Rs.40,000 crore. The government plans to conduct another round of spectrum auction before end of the current fiscal.

On depreciation of the rupee, Rangarajan said, "I think the capital inflows during the current year will be adequate to cover the Current Account Deficit (CAD). I believe the rupee will stay around this particular range (Rs.54-55 a dollar) even by the end of this year."

On key policy rates cut by the RBI, Rangarajan said, "We need to watch the behaviour of prices for some more time. Of course, the apex bank will take all factors into account, but there is still some time for RBI to take a decision."

RTTNews