IMF chief Horst Kohler, who is in Dubai to World Bank Group and IMF meetings, did not comment on the issue of BPCL and HPCL divestment.
The higher salaries and pension outgo will be equivalent to about one per cent of the GDP.
The Reserve Bank of India (RBI) has kept its key lending rate, the repo rate, unchanged at 5.25 per cent for the second consecutive time, citing concerns over rising energy prices, supply disruptions from the West Asia crisis, and potential inflationary pressures.
The RBI needs to maintain a healthy contingency reserve so that it can lend its support in case of a bank failure.
The fiscal deficit was 4.9 per cent of GDP in 2012-13.
Net tax receipts for the period stood at Rs 4.84 lakh cr
In his interim budget on February 17, Finance Minister P Chidambaram said the fiscal deficit would not cross 4.6 per cent of GDP, revising an earlier target of 4.8 per cent.
India's fiscal deficit reached 4.11 trillion rupees ($61.67 billion) during April-October or 74 per cent of the full-year target, government data showed on Monday.
The Union government gives debt and interest relief under the debt consolidation and relief facility to the states, which meet their targets set by Fiscal Responsibility and Budgetary Management acts. As part of the second stimulus package, states were allowed to deviate from their FRBM targets by 0.5 percentage points to go for a higher fiscal deficit of 3.5 per cent to incur additional capital expenditure to counter the slowdown in the economy of their states.
'Even last year, when India bought gold, the physical quantity was much less than the previous years.'
'Given the 50 per cent or thereabouts increase in borrowing that has been announced, it is a reasonable estimate to say that at this time, an increase of 1.7-1.8 per cent on the 3.5 per cent budgeted fiscal deficit target is being anticipated,' Chief Economic Adviser Krishnamurthy Subramanian said on Friday.
On growth, the Governor said the prospects in the last few months have improved.
India's organised gold jewellery retail sector is projected to experience a 13-15 per cent year-on-year decline in sales volumes this fiscal, following an 8 per cent drop last year, due to elevated gold prices and a recent import duty hike, according to a Crisil report.
Economists believe government might settle for a higher fiscal deficit target of 4.5 per cent to fund capex.
The central government's fiscal deficit -- the difference between its total expenditure and receipts, excluding borrowings -- for 2006-07 has been reined in at 3.5 per cent of gross domestic product.
The government had breached its fiscal deficit target given in the Budget for 2017-18 in November itself, touching 112 per cent of the limit.
Says fiscal trajectory has changed for the better over the past months.
The reopening of the Strait of Hormuz, following a ceasefire agreement between the US and Iran, is expected to significantly ease India's crude oil supply risks, lower freight costs, and reduce inflationary pressures, as global oil prices have already dropped.
The challenge of achieving fiscal deficit targets for the next two years seems daunting.
Insights from behavioural economics suggest that an ambitious nudge can be effective if three conditions are met, points out Ram Singh Insights from behavioural economics suggest that an ambitious nudge can be effective if three conditions are met, points out Ram Singh, director, Delhi School of Economics.
The central government is likely to further consolidate its fiscal deficit by 50 basis points (bps) to 5.9 per cent in FY24 from 6.4 per cent in FY23, according to a recent report released by Goldman Sachs on Tuesday. In the current fiscal year, there is going to be an upside of 0.5 per cent on the receipts side due to higher nominal GDP growth, and higher tax buoyancy because of the formalisation, the report said. The upside to expenditure is mainly going to come from incremental subsidies (0.8 per cent of GDP), in both food and fertilizer, it said. The upcoming pre-election Budget will carry forward the trend of the increased capital expenditure seen in recent years.
Overnight, the Dow Jones industrial average rose 0.4% to 13,253 and the Standard & Poor's 500 Index advanced 0.6% to 1,403 at close.
However, the finance ministry is hopeful of keeping its fiscal deficit under control.
Fiscal deficit, which was reined in during 2003-04, was relatively higher at Rs 25,998 crore (Rs 259.98 billion) in the first month of the new financial year.
Finance Minister Arun Jaitley on Wednesday said for the first time fiscal deficit target will be met without budgetary cuts.
India emerged reasonably well from 2025. But now, the oil shock and war-related supply disruptions have again driven funds out of India and significantly weakened the rupee, points out Ajay Chhibber.
The central bank said on Monday that the country's stubbornly high fiscal deficit and uncertainties arising out of the war in Iraq posed risks to growth.
The strategy to achieve the target would be to maximise revenue collections and control expenditure, Chidambaram said, while seeking support of the political parties to deal with economic and financial problems facing the country.
Global rating agency Moody's on Tuesday expressed concern on India's high fiscal deficit projected at 6.8 per cent for 2009-10 and cautioned that the situation may become complicated in the absence of measures like clear road map for disinvestment and structural reforms.
Finance Minister Pranab Mukherjee might aim for a fiscal deficit of 6.1 per cent of the GDP for the year 2010-11, although he has been stressing on the need to keep fiscal deficit at 5.5 per cent of the GDP in 2010-11 and 4.0 per cent in 2011-12. The current year's fiscal deficit is estimated to be at 6.8 per cent levels.
Claiming that the fundamentals of the economy are 'very strong', the newly-appointed economic affairs secretary Arvind Mayaram said, 'we already have a roadmap to be followed for fiscal consolidation.
Reserve Bank Governor Sanjay Malhotra announced that India's foreign exchange reserves stand at a healthy $682.3 billion as of May 29, 2026, providing approximately 11 months of import cover and strong protection against external shocks.
Finance Minister Arun Jaitley is keen to come out with reforms that can help cut fiscal deficit.
A prolonged supply shock can transmit to lower incomes, and dampen confidence and sentiment, warns Aditi Nayar, chief economist, head-research and outreach, ICRA.
Chief Economic Advisor V Anantha Nageswaran stated that India's economy is projected to return to a 7 per cent-plus growth trajectory by 2027-28 (FY28), or sooner if external conditions improve, despite near-term challenges from the West Asia crisis.
Finance Minister Arun Jaitley in the Budget speech has announced a host of measures, including hiking tax exemption limit, incentives for the housing sector and relief in indirect taxes on auto and other sectors to promote industrial output and boost growth.
