Finance Minister Nirmala Sitharaman will keep on the path of fiscal consolidation and opt for narrowing the FY24 fiscal deficit to as low as 5.8 per cent in the upcoming Budget, analysts said on Tuesday. The government may go for a fiscal deficit number which will be far lower than the 6.4 per cent of GDP budgeted for FY23, they said, pegging the Budget figure for the next fiscal in the range of 5.8 - 6 per cent. Given the fact that this will be the last full Budget of the present government, there may be a temptation to make it into an expansionist one.
After lower proceeds from 2G spectrum auctioning, economists question if government can meet the fiscal deficit target.
Experts disagree with the idea and the Reserve Bank of India (RBI), which has the sole right to print money, is not comfortable with it as well.
He said the government would not go in for providing stimulus across the board and that only specific sectors would be considered for the measure.
The fiscal deficit, which is the difference between total expenditure and revenue, as percentage of GDP will come down from 6.9 per cent in the revised estimates for the current fiscal, he said unveiling the 2010-11 Budget in the Lok Sabha.
Several critics including some rating agencies have doubted prospects of meeting this ambitious fiscal deficit target.
A marginal increase in tax collections coupled with austerity measures to control expenditure helped government to limit fiscal deficit to 34 per cent of the budgeted target by August.
The fiscal deficit touched 61.2 per cent of full year Budget Estimates or over Rs 3.24 lakh crore in end July.
Fiscal deficit, the gap between government's expenditure and revenue, stood at 4.5 per cent in FY14, lower than 4.9 per cent in FY13.
Fiscal deficit touched Rs 90,678 crore (Rs 906.78 billion) during April-August, 2006, which accounted for 60.98 per cent of the budgetary target of Rs 1,48,686 crore (Rs 1,486.86 billion) for the whole year, he said in Delhi on Friday.
Unperturbed by the rise in the fiscal deficit, Finance Minister P Chidambaram on Thursday exuded confidence that it would remain within the target of 4.8 per cent of GDP in the current financial year.
Showing signs of financial strain, the government's fiscal deficit in the first five months of the ongoing financial year has already touched 74.6 per cent of the budget estimate.
Better fiscal balance on back of revenues from 3G auctions.
The Indian stock market mythos of 36 years is wrapped in a diaphanous negligee, lashed together by a delicate, etheric sash of 1.6 bull markets. To make money from here on will require a ground invasion, trench by trench, rather than carpet bombing. Way more difficult, points out Shankar Sharma.
The government on Monday hit out at bureaucracy for not keeping pace with policy changes and promised not to take recourse to borrowings
"At the end of the year, we will do better than the budget estimates," Finance Minister P Chidambaram told reporters when asked about sharp rise in fiscal deficit in April-May as per the figures released by the Comptroller General of Accounts on Monday. The fiscal deficit for two months touched Rs 73,201 crore (Rs 732.01 billion), 54.9 per cent of estimated fiscal deficit of Rs 1,33,287 crore (Rs 1,332.87 billion) for the fiscal, mainly on account of rising oil import bill.
He used an old rule to cut the expenditure allotted to various ministries.
The government has utilised 'escape clause' under the FRBM Act which provides it leeway for relaxation of fiscal deficit roadmap during time of stress.
Arun Jaitley opted for a fiscal deficit of 3.9% in 2015-16.
Govt squeezed capital expenditure, and also cut revenue expenditure, that does not go into creating assets, by 11% in H1
The government has budgeted for total expenditure of Rs 34.83 lakh crore or 6.8 per cent of GDP. While the net tax revenue rose from Rs 5,75,697 crore in October 2020 to Rs 10,53,135 crore till October 2021, a growth of 82.93 per cent annualized, total expenditure rose only by 9.95 per cent, led by infra spending to Rs 18,26,725 crore from Rs 16,61,454 crore during the same period, the RBI said in the financial stability report.
The Union Government's fiscal deficit remained above the annual target for second month in row at the end of August, mainly on account of the impact of lockdown on revenue collections. According to the data released by the Controller General of Accounts (CGA), fiscal deficit during April-August was at 109.3 per cent of the annual target estimated in the Budget.
Fiscal deficit for 2021-22 worked out to be 6.71 per cent of the gross domestic product (GDP), lower than 6.9 per cent projected by the Finance Ministry in the revised Budget Estimates, according to government data released on Tuesday. Unveiling the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) said that the fiscal deficit in the absolute terms was be Rs 15,86,537 crore (provisional).
The GDP has been estimated at Rs 126.54 lakh-crore (Rs 126.54 trillion).
Accounting for the first Advance Estimates for 2017-18, an additional planned borrowing of Rs 200 billion, the fiscal deficit could come in at 3.35 per cent of GDP.
Finance Minister P Chidambaram has been repeatedly stressing he will meet the fiscal deficit target of 4.8 per cent of the gross domestic product in this fiscal, but HSBC said the spending-revenue gap may overshoot to 5.1 per cent.
Fiscal measures may fall short or prove to be too late to achieve the revised budget deficit target, it says.
Former Finance Minister Manmohan Singh has warned that the 'status quo please-all' Budget would not boost economic growth beyond 5-5.5 per cent as it has failed to address the unsustainable fiscal deficit pegged at 5.6 per cent for 2003-04.
The government may mobilise a whopping Rs 4 lakh crore, an amount which may help in wiping out the country's fiscal deficit, by bringing down its holding to 51 per cent in all the listed public sector firms, a report says.
Global rating agency Moody's Investors Service on Thursday said the Centre's fiscal deficit, which in the first quarter of 2006-07 crossed 50 per cent of what was projected for the whole year, is a matter of concern.
The fiscal deficit situation during April-May of the last fiscal was 37.5 per cent of the Budget estimates.
The government had pegged the fiscal deficit for 2020-21 at Rs 7.96 lakh crore or 3.5 per cent of the GDP in the budget presented by Finance Minister Nirmala Sitharaman in February.
Post office savings deposit, recurring deposit accounts and the senior citizen savings scheme account have shown the highest growth in the current financial year.
Uttar Pradesh Chief Minister Yogi Adityanath announced that the state has secured investment proposals worth approximately Rs 50 trillion over the past nine years, attributing this economic revival to the enforcement of the rule of law and strategic policy changes. He affirmed UP's trajectory towards becoming a $1 trillion economy by 2029-30.
Deficits could come under more pressure in coming years as states implement their own Pay Commissions.
India Ratings and Research predicts the Reserve Bank of India (RBI) will maintain the repo rate at 5.25 per cent throughout FY27, despite potential inflationary pressures from higher fuel prices, with inflation expected to remain within the central bank's tolerance band.
