New Delh - India's Finance Minister Pranab Mukherjee promised Tuesday the government would reduce the fiscal deficit as it seeks to put the nation's financial house in order.

He said the government would cut the deficit to four percent of gross domestic product by 2012, down from an expected 6.8 percent in the current financial year.

India's deficit, which stood at 6.2 percent last year, has been swollen by stimulus measures taken by the government to shield the economy from the impact of the global economic slump.

Prime Minister Manmohan Singh told the forum at the weekend that the government would take "appropriate action next year" to roll back the stimulus.