“Some measures may cause immediate pain but this was necessary to ensure that the fiscal deficit came down to 3 per cent in the next three years. Steps were also being taken to contain the Current Account Deficit,” Chidambaram said at the NDC meeting.
The government in the recent past had hiked diesel prices by over Rs 5 per litre and capped the number of subsidised LPG cylinders to six per family in a year.
Gold imports which contributed $64 billion to the widening CAD will also have to be curbed, the minister warned. India’s CAD is expected to touch 3.5 per cent of the GDP in the current fiscal. Chidambaram also lauded state governments for containing the fiscal deficit to 2.1 per cent of the GDP.