Exuding confidence that the economy will grow by 8.5 per cent in 2011-12, Finance Minister Pranab Mukherjee on Wednesday said the recent hike in prices of petroleum products will not have much impact on the fiscal deficit.
'While the Budget would be growth-friendly, it would not come at the expense of an increase in the fiscal deficit.'
D R Dogra, managing director and CEO, Care Ratings, says that the finance minister should start the process of fiscal consolidation from his Budget 2010-11.
Three weeks ahead of the Budget, Asian Development Bank expressed concern over high fiscal deficit, which, it said, was acting as a roadblock to India's economic growth.
Could turn out below last year's budget estimate, with some improvement in revenue and spending
The most striking features of this Budget was its focus on simplification and improving the ease of doing business in India, asserts Kaku Nakhate.
For his first Budget in July 2014, Jaitley inherited a fiscal deficit target of 4.1 per cent of GDP. From 4.1 per cent, the fiscal deficit came down to 3.4 per cent by 2018-19, with two slippages from the budgeted targets, in 2017-18 and 2018-19, the former due to introduction of the GST, says Arup Roychoudhury.
The government on Tuesday said the fiscal target set for 2003-04 was realistic and rejected as unfounded criticism that it would not be met.
The disbursement of the second tranche comes on a day when the International Monetary Fund is holding virtual discussions on Pakistan's upcoming budget, as the visit of its mission to Islamabad was delayed due to security concerns in the region.
IThe fiscal deficit target for 2020-2021 was originally set at 3.5 per cent of GDP. But the government's revenues have collapsed and its expenditure burden will only increase over the Budget estimates.' With the government having already planned for an additional borrowing of over Rs 4 trillion, the fiscal deficit for the current year would be much higher than the Budget estimate, notes A K Bhattacharya.
The obvious temptation for Mr Jaitley would be to achieve a better fiscal deficit figure than what he had promised in July.
The Planning Commission projected the Centre's fiscal deficit to come down to three per cent of the gross domestic product.
'India has the potential to grow at more than 7%, with the monetary policy providing a supportive hand.'
'The nominal GDP growth assumption for FY25 may be revised upwards on higher growth expectations.'
The Union Budget for 2004-05, which is being viewed as a "litmus test" for the Congress-led government, may unveil the roadmap for wiping out revenue deficit well in advance by 2007 and a subsequent reduction in fiscal deficit to manageable limits.
Despite earnest government statements, fiscal correction is still distant.
India's short-term problems should not obscure the necessary changes for long-term fiscal stability.
India needs to create buffers for future economic downturns.
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A higher subsidy burden and lower growth will weaken the country's fiscal metrics, analyst Atsi Sheth said in the presentation.
India on Friday made a strong pitch for a sovereign rating upgrade with Moody's and also questioned the parameters based on which the US-based agency accords ratings, sources said on Friday. Ahead of its annual review of the sovereign rating, Moody's Investors Service representatives met Indian government officials during which the officials highlighted the reforms and strong fundamentals of the Indian economy. A higher rating for India would mean the nation is less riskier, translating into lower interest rates on borrowings.
Economists have said if a stimulus is needed it should be different from what was provided in 2008-09, when the economy faced the ripple effects of a global meltdown following the Lehman Brothers collapse.
Finance Minister Nirmala Sitharaman on Thursday announced a Rs 11.11 lakh crore spending on infrastructure and vowed to continue reforms as she resisted resorting to populist measures in Modi government's last Budget before general elections, instead choosing to stay on the path of cutting deficit while bolstering measures for focus groups.
International Monetary Fund on Friday warned the Centre of high fiscal deficit that could come in the way of sustaining high growth in the economy, which clocked 8.4 per cent rise in the second quarter of 2003-04.
Growing fiscal deficit as a result of governments' efforts to prop up their respective economies has the potential to undermine the autonomy of central banks, whose credibility has already been dented due to the financial meltdown, RBI Governor D Subbarao said on Friday.
After revising the sovereign outlook for India from stable to negative, Standard & Poor's Director for Sovereign and International Public Finance ratings Takahira Ogawa says the fiscal position holds the key to future course of action.
The government is proposing to restrict subsidies and introduce medium-term expenditure management framework to contain fiscal deficit, Parliament was informed on Thursday.
The government's fiscal profligacy has made a mockery of the FRBM Act.
Finance Minister Nirmala Sitharaman will have to do a tight-rope walk between staying fiscally prudent and general public expectations of lower taxes and a wider social security net, while at the same time firing the engines of the economy before general elections. Sitharaman will on Wednesday present her fifth straight Budget at a time when the economy is slowing due to global headwinds and specific sectors need attention. In the run-up to the Budget presentation, expectations are rife that she may tweak income-tax slabs to provide relief to the middle class and increase spending on the poor through programmes such as the rural job scheme while ramping up financial incentives for local manufacturing.
The rising goods and services tax (GST) and personal income-tax collections may bolster the Narendra Modi government's ability to announce new schemes or enhance existing ones.
Parliament on Tuesday approved the long-awaited fiscal responsibility legislation after Finance Minister Jaswant Singh promised there would be no lowering of developmental expenditure.
Contracting for the third month in a row, India's exports declined by 8.8 per cent to $33.88 billion in February due to slowdown in global demand, even as the trade deficit touched about a year low of $17.43 billion during the month, according to official data released on Wednesday. Imports also declined by 8.21 per cent to $51.31 billion as against $55.9 billion recorded in the corresponding month last year. Cumulatively, however during April-February this fiscal, the country's overall merchandise exports rose by 7.5 per cent to $405.94 billion.
he government in its budget for 2009-10 proposed to raise Rs 4.5 lakh crore (Rs 4.5 trillion) from the market, up from Rs 3.1 lakh crore (Rs 3.1 trillion) in the previous year and pegged the fiscal deficit at 6.8 per cent of the GDP as against 6.2 per cent in 2008-09.
A quick assessment of the ground reality will tell you that it is a reflection of the finance ministry's mistaken faith in factors beyond its control.
International rating agency Fitch said on Tuesday the change in India's sovereign rating is constrained by the high level of fiscal deficit and its review will be done after the budget for 2005-06 has been presented.
Economic Advisory Council to the Prime Minister has identified ten themes, including economic growth and job creations that need attention.
India's merchandise exports rose by 6.21 per cent to $33.57 billion in October this year even as trade deficit ballooned to $31.46 billion during the month, government data showed on Wednesday. Imports increased to $65.03 billion in the month under consideration, as against $57.91 billion recorded in October 2022. The country's trade deficit in October stood at $31.46 billion.
Reserve Bank of India Deputy Governor Rakesh Mohan said on Friday that government revenues rather than expenditure were a fiscal concern.
Any number tilting towards 5.5 to 6 could lead to a great disappointment for foreign institutional investors fuelling the current market rally.
Finance Minister Nirmala Sitharaman will be presenting her fifth Budget that may do a tightrope walk between staying fiscally prudent and meeting general public expectations of lower taxes and a wider social security net, while at the same time firing the engines of the economy.
Indian and US officials will begin deliberations on the proposed bilateral trade agreement in Washington from Wednesday with an aim to iron out issues and give an impetus to the negotiations.
