The Government on Thursday said that it will review its fiscal deficit target of 5.1% of GDP for the current fiscal year in its mid-year review of the economy.

The Centre aims to bring down the budget shortfall - the gap between expenditure and revenue collection - from 5.9% of GDP in FY12 to 5.1% or about Rs 5.13 lakh crore in the financial year ending in March 2013.

"The fiscal deficit target for the current financial year will be reassessed after mid-year review depending on the pace of expenditure and resource position of the government," Finance Minister P. Chidambaram said in Rajya Sabha.

He said that the reduction in fiscal deficit will be achieved through a mix of rationalisation in total expenditure as a percentage of GDP and improvement in gross tax revenues.

The Government has taken several steps, including 10% mandatory cut on non-plan expenditure, and economic measures like rationalisation of expenditure and optimisation of available resources. Also, the Government endeavours to restrict expenditure on central subsidies.

"Similar steps are expected to be continued in the coming years to contain the fiscal deficit," Chidambaram said. 

CRISIL Research has increased its fiscal deficit forecast to 6.2% of GDP from the earlier estimate of 5.8% of GDP. 

Late last month, the Reserve Bank of India (RBI) cut its GDP growth forecast for FY13 to 6.5% from the earlier projection of 7%, citing high fiscal deficit, sticky inflation and a possible drought.

In the Union Budget announced in February, the Government had targeted a GDP growth of 7.6%.

India's GDP in FY12 declined to 6.5%, which was 2% lower than FY08.