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NEW DELHI, Oct 8 (Reuters) - India will unveil a "credibleand feasible" fiscal consolidation path for the next five years,Finance Minister P. Chidambaram said on Monday, days after agovernment panel said the economy was on the edge of a fiscalprecipice.
A slowing economy has hurt tax returns while subsidies onfuel, food and fertilizer have further strained governmentfinances and endangered India's investment-grade credit rating.
"No one will have confidence in the Indian economy if thereis uncertainty about the fiscal stability of the country,"Chidambaram told a news conference.
"It is our intention to announce a credible and feasiblepath of fiscal correction beginning this year and ending in thefifth year of the 12th plan," which ends in March 2017.
In recognition of mounting worries over public finances,Chidambaram, after taking over the ministry in August, appointeda committee led by a former official, Vijay Kelkar, to recommendways of improving government finances.
In its report, the Kelkar panel suggested slashing fuel,food and fertilizer subsidies urgently to curb a deficit it saidcould hit 6.1 percent of GDP this fiscal year.
Chidambaram did not give details of his plans for fiscalprudence, but said he was waiting for more feedback on theKelkar report.
To shore up its balance sheet, the government last monthraised the price of heavily subsidised diesel and cut suppliesof subsidised cooking gas despite strong political opposition,including from within its own coalition.
In March, the government had promised to narrow the fiscaldeficit to 5.1 percent of GDP this year from 5.8 percent lastyear. But analysts doubt New Delhi will come good on thatcommitment.
(Reporting By Manoj Kumar; Writing by Rajesh Kumar Singh;Editing by Frank Jack Daniel and Sanjeev Miglani)
Keywords: INDIA ECONOMY/