Prior to this, even Reserve Bank of India (RBI) has shown concern stating the fiscal deficit would widen in case there is the alignment is not established between the domestic retail prices of petrol and diesel with that of international market.
RBI, in a monetary policy further elaborated that the widening of the fiscal deficit would require steps to be taken in order to moderate the demand and curb inflation.
Explaining the issue further, Gopalan, on the sidelines of a Ficci event, stated that fiscal deficit would take the crude oil prices and the behavior of monsoon as the key factor for its determination.
He also reminded that in a declaration given by the Finance Minister, Pranab Mukherjee, that the number would surely rise in case the international oil situation remains about $120 a barrel) and also the monsoon not being responsive.
Mukherjee also mentioned that any rise in the crude oil prices would have the capacity to pull down the economic growth of India to 8% in 2011-12 from a projected 9%. The Indian Meteorological Department (IMD), there would normal monsoon rain showers in India this year.
The current financial year had recorded an increase in fiscal deficit at 4.6% of the Gross Domestic Product. This is why the government is trying its best to maintain to the fiscal deficit target set in the Budget 2011-12.
As per the forecast made by The Indian Meteorological Department (IMD), there would normal monsoon rain showers in India this year.