Economic measures will help reduce fiscal deficit: Pranab Mukherjee

While inaugurating the Indian International Trade Fair in Delhi on Wednesday, President Pranab Mukherjee said measures like allowing foreign direct investment (FDI) in multi-brand retail and civil aviation will help in reducing government's fiscal deficit and putting the economy back on high growth path.

"The government has recently unveiled several policy measures designed to put economy back on high growth trajectory," he said.

In September, the Cabinet Committee on Economic Affairs (CCEA) allowed 51 per cent FDI in multi-brand retail and 49 per cent investment by foreign airlines in Indian carriers.

Besides, last month the government approved a proposal to hike foreign investment ceiling in the insurance sector to 49 per cent from the present 26 per cent. Also, it allowed FDI in pension funds and said the limit could go up 49 per cent in line with the cap in insurance sector.

"Simultaneously, measures have also been announced to keep the government subsidy burden in check, thereby bringing about reduction in the fiscal deficit. These measures should help in restoring the economy growth momentum," the president said.

The 2012-13 Budget pegged fiscal deficit at 5.1 per cent of gross domestic product (GDP). However, the government has raised the fiscal deficit target to 5.3 per cent of GDP this financial year.

The growth rate was 5.5 per cent in the first quarter of this financial year. The Reserve Bank of India (RBI) has lowered the growth projection for this financial year to 5.8 per cent in 2012-13 from 6.5 per cent estimated earlier.

with inputs from PTI