Indian govt should stick to fiscal deficit target for this year - industry body

FILE PHOTO: A partial solar eclipse is seen at a construction site in Mumbai

NEW DELHI (Reuters) - India's federal government should stick to the fiscal deficit target laid out for this fiscal year and aggressively focus on privatising state-run companies, the country's top industry body said in a statement on Monday.

The federal budget should adhere to the fiscal deficit target of 6.4% of gross domestic product (GDP) for the current year and aim to reduce it to 6% of GDP next year, the Confederation of Indian Industry (CII) said after a pre-budget consultation meeting with Finance Minister Nirmala Sitharaman.

The government has started the process of making the federal budget for the fiscal year starting April 1, and will likely present it on Feb. 1, CII said.

"There should be aggressive focus on privatization," the industry body said, adding that the budget should also increase capital expenditure to 10 trillion rupees from this year's estimated 7.5 trillion rupees.

Indian government has been struggling to privatise state-run firms and had to put on hold some of its earlier plans such as selling one of the flagship oil refiners Bharat Petroleum Corp Ltd, for which it failed to attract any suitors.

In 2020, Finance Minister Nirmala Sitharaman announced plans to privatise most state-run companies, including banks, miners and insurers.

However, besides selling Air India to conglomerate Tata Group, India has not been able to privatise any major firms.

(Reporting by Shivangi Acharya; Editing by Dhanya Ann Thoppil)