New Delhi, Dec 15: Underlining the government's intent to reduce the fiscal deficit to three percent of GDP by 2016-17, Prime Minister Manmohan Singh Saturday said the actions in correcting energy pricing, reducing diesel and LPG subsidies, were for achieving this target.
"The finance minister has come out with a roadmap to reduce it(fiscal deficit) to 5.3 percent this year and to 3.0 percent by 2016-17. Our action in correcting distortions in energy pricing, reducing diesel and LPG subsidies, was aimed to achieve this objective," Singh told the 85th Annual General Meeting here of industry body, Federation of Indian Chambers of Commerce and Industry.
Describing the decisions as "politically difficult", the prime minister said: "But we had the courage of our conviction and the interests of our people at heart."
"Well targeted subsidies have an important role to play in softening the harsh edges of extreme poverty," he added.
However, under pricing of energy, mainly of electricity and petroleum products, had greatly affected the resources available for investments in infrastructure and social development, Singh said.
Last year the central government's fiscal deficit touched a high of 5.9 percent.
The subsidies on oil alone are more than what the government spends on health and education put together.
"We need to address these issues even as we ensure that the poor and the vulnerable are effectively protected," said the Prime Minister.