The government will not hesitate to take harsh decisions to arrest fiscal and current account deficits, Union Finance Minister P Chidambaram said.

Mr. Chidambaram claimed that the government had drawn red lines for both fiscal deficit and current account deficit (CAD), adding that the red lines would not be cross in any circumstances.

Speaking on the topic, he said, "The government is committed to the path of fiscal consolidation and has drawn red lines for the two deficits . We shall not allow the red lines to be breached under any circumstances. We are prepared to take difficult decisions."

The finance minister was speaking at the International Monetary Fund (IMF) Committee plenary meeting on last Saturday.

The government aims to cut fiscal deficit to 4.8 per cent of the country's gross domestic product (GDP) in current fiscal year from 4.9 per cent in the last fiscal year.

The current account deficit, the difference between inflow and outflow of foreign exchange, reached a record high of 4.8 per cent of the GDP ($88.2bn) last year. The government aims to bring it down to 3.7 per cent in the current fiscal.