Fiscal deficit target is too ambitious, say economists hired by corporates
‘Overall... it is a reasonable budget given that it is an election year. Next year's fiscal target is very stiff and without growth moving up ,it is difficult to meet,’ Crisil chief economist D K Joshi said.
Axis Bank chief economist Saugata Bhattacharya said the budget is a little aggressive in terms of fiscal consolidation target. The fiscal deficit target of 4.1 per cent is an aspirational target.
Economic growth for FY14 is estimated at 4.9 per cent. Last fiscal, growth fell to 4.5 per cent. Economists, however, believe FY15 fiscal deficit target for 4.1 per cent may be revised upwards when the new government comes to power.
‘The assumption on tax front is an aggressive one. The nominal GDP growth is seen around 13 per cent and if it is not achieved, we could see some disappointment on tax collection front,’ Shubhada Rao of Yes Bank said.
Foreign brokerage Credit Suisse said with the general elections round the corner this is not a `normal' budget, but largely a chance to tell listening voters what the government had achieved during 10 years in office.
The government on Monday cut Rs 79,790 crore from the Plan expenditure of Rs 5,55,532 crore for the current financial year due to burgeoning fiscal deficit. ‘There are concerns over quality of fiscal adjustment as plan expenditure has been cut,’ Crisil's Joshi said. The government also pegged net borrowing for 2014-15 at Rs 4.57 lakh crore, Rs 11,580 crore less than the revised estimates for FY'14.
‘Net market borrowing of Rs 4.57 lakh crore is expected to finance 87 per cent of the fiscal deficit, while gross market borrowings are likely at Rs 5.97 lakh crore in FY15, better than market expectations of Rs 6.1-6.4 lakh crore,’ Japanese brokerage firm Nomura said.
Axis Bank chief economist Saugata Bhattacharya said the budget is a little aggressive in terms of fiscal consolidation target. The fiscal deficit target of 4.1 per cent is an aspirational target.
Economic growth for FY14 is estimated at 4.9 per cent. Last fiscal, growth fell to 4.5 per cent. Economists, however, believe FY15 fiscal deficit target for 4.1 per cent may be revised upwards when the new government comes to power.
‘The assumption on tax front is an aggressive one. The nominal GDP growth is seen around 13 per cent and if it is not achieved, we could see some disappointment on tax collection front,’ Shubhada Rao of Yes Bank said.
Foreign brokerage Credit Suisse said with the general elections round the corner this is not a `normal' budget, but largely a chance to tell listening voters what the government had achieved during 10 years in office.
The government on Monday cut Rs 79,790 crore from the Plan expenditure of Rs 5,55,532 crore for the current financial year due to burgeoning fiscal deficit. ‘There are concerns over quality of fiscal adjustment as plan expenditure has been cut,’ Crisil's Joshi said. The government also pegged net borrowing for 2014-15 at Rs 4.57 lakh crore, Rs 11,580 crore less than the revised estimates for FY'14.
‘Net market borrowing of Rs 4.57 lakh crore is expected to finance 87 per cent of the fiscal deficit, while gross market borrowings are likely at Rs 5.97 lakh crore in FY15, better than market expectations of Rs 6.1-6.4 lakh crore,’ Japanese brokerage firm Nomura said.