Pranab sees fiscal deficit at 3 per cent post-FY12

The current level of fiscal deficit is unsustainable and the government would bring it down to 3 per cent of the country's gross domestic product (GDP) after the end of fiscal year 2011-12, finance minister Pranab Mukherjee said today.

Wild estimates put the current level of fiscal deficit at around 6.8 per cent and Mukherjee said this would be reduced to 5.5 per cent in the next fiscal (2010-11) and further to 3.0 per cent in 2011-12.

Addressing the Rajya Sabha earlier, on Monday, Mukherjee had dismissed suggestions that the government's current level of fiscal deficit might exceed 6.8 per cent of GDP.

The ballooning of the fiscal deficit was a direct result of the fiscal stimulus announced in the last budget to minimise the impact of the global financial meltdown on the Indian economy.

Minister of state for finance Namo Narain Meena, meanwhile, said in written reply that there was no serious threat of counterfeit currency to the economy as such notes in circulation is negligible.

"The Reserve Bank of India maintains that the volume of fake currency is negligible, at less than 0.001 per cent (eight notes per million pieces) of the total notes in circulation and, therefore, there is no serious threat to the economy on this account," Meena said.