Fiscal consolidation - how real?

Last week, on October 29, the finance minister issued a statement laying out the government’s road map for fiscal consolidation during the period of the 12th Five-Year Plan, 2012/13-2016/17. Specifically, he committed that the fiscal deficit of the central government would be held at 5.3 per cent of GDP in 2012/13 and then reduced gradually to 4.8 per cent in 2013/14, 4.2 per cent in 2014/15, 3.6 per cent in 2015/16 and, finally, three per cent in 2016/17.

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