Kolkata:  Noting that India's current account deficit has become ‘too enlarged’, a Planning Commission member on Saturday called for a more restrained fiscal deficit.

'Our current account deficit has become too much enlarged on account of burgeoning imports and sluggish growth. Therefore, financing the current account deficit is becoming a challenge,' plan panel member Saumitra Chaudhuri told reporters on the sidelines of an interactive session organised by the Confederation of Indian Industry (CII) here.

The Central Government's fiscal deficit is pegged at around Rs.3.07 lakh crore in the first seven months of the current fiscal after a fall in non-tax revenue which touched 54.4 percent of the budget estimates during the first seven months of 2011-12.

Non-tax revenue during the period stood at Rs 68,211 crore against Rs 1.75 lakh crore in the same period last fiscal.

Chaudhuri said external funding, which was not a problem even a few months ago, has become scarce now.

He contended that the sovereign debt crisis in euro zone would not soon be solved satisfactorily.

'Euro zone crisis in my view is not likely to be solved satisfactorily any time soon. European banks will try to compress their balance sheets to efficiently make space for new capital,' he said, adding that it would eventually lead to drying of dollar liquidity.

'One can expect that the central bank (Reserve Bank of India) will try and offset that, but to what extent, that needs to be seen,' he added.

(Agencies)