New Delhi,
\nThe deferral of fiscal consolidation roadmap has left the task of strengthening weak public finances to the next government after the 2019 general elections, Fitch Ratings said on Tuesday.<\/p>\n
The government has revised its 2018-19 fiscal deficit projections to 3.3 per cent of GDP and for current fiscal to 3.5 per cent of GDP, compared with original targets of 3 per cent and 3.2 per cent, respectively.<\/p>\n
The postponement of consolidation in part reflects policies to support the economy, which was held back last year by weak investment and disruptions from demonetisation and the introduction of the Goods and Services Tax (GST), Fitch said.<\/p>\n
\u201cThe Indian government\u2019s budget has pushed back fiscal consolidation, leaving much of the task of addressing the country\u2019s relatively weak public finances to the next administration,\u201d Fitch Ratings said in a statement.<\/p>\n
However, the budget target revisions are modest, and are balanced by positive reform momentum and a strong economic outlook, the US-based agency said.<\/p>\n
New spending initiatives announced in the budget include measures to boost rural incomes, an ambitious health insurance scheme intended to cover about 50 crore people, and funding for the construction and upgrading of medical colleges and hospitals.<\/p>\n
\u201cThis spending will benefit a large section of the public ahead of general elections due by May 2019,\u201d Fitch said.<\/p>\n
The fiscal slippage of 0.3 per cent of GDP in both 2017-18 and 2018-19 is relative to last year\u2019s budget targets of 3.2 per cent and 3 per cent of GDP, respectively.<\/p>\n
The target for current fiscal was missed largely because of higher expenditure, Fitch said.<\/p>\n
This government\u2019s initial fiscal plan, set out in 2014, aimed to reduce the deficit to 3 per cent of GDP by FY18–the level consistent with the Fiscal Responsibility and Budget Management (FRBM) Act of 2003.<\/p>\n
\u201cIt now does not expect to hit that target until 2020-21, beyond its current electoral term,\u201d Fitch said.<\/p>\n
Despite this slippage, the government stated in the budget that it planned to adopt a ceiling of 40 per cent of GDP for central government debt, as recommended by the FRBM Committee in January 2017, compared to an estimated 50 per cent of GDP in 2017-18.<\/p>\n
\u201cThis would be a positive step towards a more prudent fiscal framework, if eventually adhered to, even if debt is unlikely to fall below the ceiling by 2022-23, as recommended by the committee,\u201d Fitch said.<\/p>\n
It said the revenue forecasts made in the budget appeared broadly credible.<\/p>\n
\u201cSluggish investment growth remains a drag on the economy, but a recovery might be supported by a corporate tax change that makes more companies eligible for the lower SME bracket, as well as the government\u2019s continued infrastructure investment drive,\u201d it said.<\/p>\n","protected":false},"excerpt":{"rendered":"
New Delhi, The deferral of fiscal consolidation roadmap has left the task of strengthening weak public finances to the next government after the 2019 general elections, Fitch Ratings said on Tuesday. The government has revised its 2018-19 fiscal deficit projections to 3.3 per cent of GDP and for current fiscal to 3.5 per cent of […]<\/p>\n","protected":false},"author":1,"featured_media":21219,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-21218","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/21218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=21218"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/21218\/revisions"}],"predecessor-version":[{"id":21220,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/21218\/revisions\/21220"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/21219"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=21218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=21218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=21218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}