NEW DELHI (Reuters) - A surge in revenue collections from a fast-growing economy could help India cut its federal deficit to 3 percent of GDP in the year ending March 2009 but wiping out the revenue deficit by then remains a challenge, a finance ministry report said on Thursday.
In its annual economic survey, the government said close monitoring of global economic developments was crucial as India was now more integrated than ever before and any adverse situation abroad could have an impact locally.
"As the trends of receipts indicate, it may not be very difficult to achieve the target of 3 percent fiscal deficit by 2008/09," the report said.
"However, the target of bringing revenue deficit to zero by end of 2008/09 would remain a challenge."
Economic growth, which has averaged over 9 percent in the past two fiscal years, is likely to moderate to a still strong 8.7 percent this fiscal year due to a series of interest rate rises.
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http://in.reuters.com/article/businessNews/idINIndia-32197420080228
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