"I am glad we have achieved the 4.1 per cent fiscal deficit target of last year. The journey to 3 per cent has various challenges," he said replying to a question in the Lok Sabha.
Among the challenges to achieving the fiscal deficit target was the report of the Pay Commission which, he said was expected soon, as well as the additional ten per cent fund devolution to states recommended by the Finance Commission report, as this would lead to fund outgo from the Centre.
Besides, he said that public investment has to go in to infrastructure as private sector was usually reluctant to put in funds there.
Another challenge, Jaitley said, was to "prime up the economy and push growth" for which he has targeted Rs 70,000-crore (Rs 700-billion) investment in infrastructure in the current fiscal.
"Besides the area of infrastructure, any additional resource that I would have I tend to concentrate on irrigation," Jaitley said when asked by Trinamool Congress member Sugata Bose whether the government would continue to invest in infrastructure for the next three years at the same rate prevailing now.
As per the fiscal consolidation roadmap outlined in 2015-16 Budget, fiscal deficit is to be brought down to 3.9 per cent of gross domestic product in current fiscal, then to 3.5 per cent in 2016-17 and further to 3 per cent by 2017-18.
The 3 per cent target would now to reached a year later than planned earlier.
He said the challenges before any Finance Minister is to balance growth and fiscal deficit and to control the deficit the government has to maintain strict fiscal discipline and adopt austerity measures.
"If fiscal discipline is established over the next 2-3 years, fiscal deficit will be better," Jaitley said, adding the fiscal deficit of states are better than that of the Centre.
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