Indian Finance Minister Palaniappan Chidambaram said on Tuesday the country's revenue deficit would not be cut in the fiscal year starting April 1 but expects a 0.2 percent cut in its fiscal deficit. "In the year beginning April 1 we will not be able to reduce the revenue deficit. We will remain on the pause mode," Chidambaram told reporters during a visit to Singapore. "As far as the fiscal deficit is concerned we are confident of reducing the deficit by 0.2 percent."
He said India will resume on the path of "fiscal correction" beginning April 1, 2006.
Chidambaram also said he expected domestic interest rates to remain stable over the medium term.
"Indian banks are flush with money. There is huge liquidity in the system. In the medium term, I think interest rates will remain stable."