Acting finance minister Pranab Mukherjee said on Monday the government cannot indulge in 'reckless borrowing' and did not have parliamentary mandate to tweak taxes.
"I can't indulge in reckless borrowing. . .," he said after presenting the Interim Budget for FY'10 in Parliament.
The government has pegged fiscal deficit at 5.5 per cent of gross domestic product for the next financial year, against the revised figure of 6 per cent in the current financial year.
The fiscal deficit target for the current fiscal was 2.5 per cent. However, fiscal measures initiated in the wake of the global economic downturn and reduction in revenue collection have impacted resource mobilisation resulting in widening of deficit.
Analysts too fear that returning to an era of high fiscal deficit could push the country into the vicious cycle of high inflation.