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India's Fiscal Deficit Touches 94% Of Full-year Target

India's fiscal deficit has reached 94 percent of the annual budget target in the first eight months of the current financial year, ringing alarm bells and raising concerns that the government will likely overshoot its target of containing the deficit at 4.8 percent of GDP for the fiscal year ending March 31, 2014.

Latest data released by the Controller General of Accounts showed that the fiscal deficit rose to Rs.5.09 lakh crore in the April-November period, almost 94 percent of the whole year's budgetary target of Rs.5.43 lakh crore.

Both the revenue and primary deficits have exceeded the budget estimates at 103.5 percent and 171.8 percent of the projections, respectively during this period.

Chidambaram had called the target of 4.8 percent, a "red line" that will not be breached. The government will have to rein in spending and cut subsidies to meet its target.

Terming the fiscal situation as "gloomy", rating agency ICRA said that some restriction of productive expenditure would be necessary for sticking to the desired target. Global rating agencies have already warned of a rating downgrade if deficit target is not met.

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