India's fiscal deficit for financial year 2013-14 will likely be below the government's red-line but there is need to continue on the path of fiscal consolidation to improve the sustainability and quality of fiscal adjustment, according to Reserve Bank of India (RBI) Governor Raghuram Rajan.

Mr. Rajan said it was important that the country spend money on required public investment, even while decreasing subsidies and entitlements.

Speaking on the topic, he said, "I have no doubt that the fiscal deficit for 2013-14 will be close to, or below, the Finance Minister's red line. We need to continue on the path of fiscal consolidation constantly improving the sustainability and quality of fiscal adjustment."

Mr. Rajan was delivering the D. R. Gadgil Memorial Lecture on 'Inclusive growth & the role technology can play in it' on Thursday.

During the lecture, he stressed on need to strengthen growth, particularly through investments, maintaining a moderate CAD, maintaining a low fiscal deficit, and decreasing inflation.

Going forward, he suggested that there should be moderation in agricultural support price inflation that would ensure that those prices only provide a baseline level of support when farmers are in trouble, without relocating market prices.

On Wednesday, Mr. Rajan confirmed that the centyral bank had given in-principle approval for setting up of a new payment system that would allow people without bank accounts and debit cards to withdraw cash from ATMs. The system would allow a person to receive a code on its mobile phone that he/she will use to withdraw money from an ATM.