Fiscal deficit can spin out of control

The macroeconomic backdrop in which this year's Finance Bill was presented was — a sharp slowdown in real GDP growth (6.9 per cent as against last year's Budgetary target of around 9 per cent); widening central fiscal deficit (revised estimate of 5.9 per cent of GDP as against last year's budgetary target of 4.6 per cent of GDP); and continuing pressure due to inflation (projected to be in the range of 6.5-7 per cent by the end of March 2012).

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