High 3G returns will help curb price rise: Pranab

Finance minister Pranab Mukherjee said on Friday that the higher than expected returns from the auction of third generation spectrum was a ''pleasant surprise'' and would give him more elbow room to deal with prices.

Asked if it will ease the current fiscal deficit strain, Mukherjee told CNBC-TV18 in an interview that he would like to pleasantly "surprise" the country and an appropriate announcement would be made in Parliament. Mukherjee, however, said given the size of the country, "I am comfortable, but not over-enthusiastic."

He further said, "I am particular to keep the fiscal deficit at the level which I have projected, rather to improve it ... growth with fiscal consolidation and price stability are the ideas of priority to me."

The 3G auction is estimated to fetch over Rs60,000 crore to the exchequer, against the budget estimate of Rs35,000 crore. "When I give the final figure to Parliament, I would like to give a pleasant surprise to the people, that is why I am not making any comment right now... (I am) watching the situation. After all I shall have to go through the whole year," the minister added.

Mukherjee in his budget for 2010-11 proposed to bring down the fiscal deficit to 5.5 per cent of the Gross Domestic Product (GDP) from 6.7 per cent a year ago.

The all-India bid at the end of 30th day of the 3G auction stood at Rs15,416.56 crore and the revenues to the government at this price would be Rs62,254 crore against an estimated Rs35,000 crore in the budget 2010-11.

Inflation, which crossed 10 per cent in February, declined marginally to 9.59 per cent in April. Food inflation is hovering around 16-17 per cent.
As regards growth, the GDP is expected to record a growth of 7.2 per cent during 2009-10 and is slated to move up to around 8.5 per cent in the current fiscal.