Breaking: India going to stick to deficit target, may change bank report

India is likely to stick to its fiscal deficit target of 3.2 percent of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalize banks, an adviser to the prime minister revealed on Tuesday afternoon.

Many policy makers from Delhi have suggested fiscal stimulus is needed to boost economic growth but the central bank has warned that missing the target could hit macro-economic stability.

Indian stocks slid last month on reports that a stimulus package worth up to 500 billion rupees ($7.7 billion) might be in works – one that would widen the deficit to 3.7 percent of GDP.