NEW DELHI: India's government will not embark on a pre-election spending splurge in next month's budget as it seeks to bring down the deficit, the finance minister said in an interview published Wednesday.

Finance Minister P. Chidambaram is due to unveil a budget at the end of next month as the Congress-led administration tries to reverse a slowdown in growth in Asia's third largest economy ahead of elections due early next year.

The government's decision in September to hike the price of diesel by 12 per cent as well as ration the number of subsidised gas cooking bottles was deeply unpopular among voters and prompted a key ally to quit the coalition.

But having targeted growth of between six and seven per cent in the coming year, Prime Minister Manmohan Singh's administration has stressed that bringing the budget deficit down to below five per cent is its top priority.

“The red lines are that the fiscal deficit for the current year will be no more than 5.3 per cent and the fiscal deficit for the next year will be no more than 4.8 per cent,” Chidambaram told The Financial Times.

“So I think all that we have said and all that we have done points to a responsible budget. The budget can be nothing except a responsible budget.”

India's central bank cut interest rates Tuesday for the first time in nine months and reduced the amount of cash banks must keep in reserve as it tried to boost investment and kick-start the flagging economy.

The government cut its growth forecast last month to just under six per cent for this financial year, putting India on track for its worst performance in a decade.

The slowdown has triggered a fall-off in support for Congress and the latest poll indicated a drop in popularity.

The hike in diesel prices was part of a series of economic reforms that the government implemented after warnings that its credit rating could be downgraded.

Much of the world would envy such a growth rate but India says it needs at least nine-to-10 per cent expansion to significantly cut poverty.