"While Sri Lanka's public debt has risen to over 74 percent of GDP by 2015-end; capital outflows have intensified and the overall balance of payments has deteriorated," the IMF said at the conclusion of its annual review for which a team of its officials visited the country from February 1 to 5.
Addressing the Consultative Committee attached to the Finance Ministry, Arun Jaitley also said that India has potential to grow at a much faster pace even as he exuded confidence that fiscal deficit target for current financial year will be within target
Ahead of the Budget, RBI GovernorRaghuram Rajan today warned against generating economic growththrough additional debt saying that any deviation from thefiscal consolidation path will hurt stability of the economy.
In value terms, the April-December fiscal deficit stood at Rs 4.88 lakh crore, or 88 percent, of 2015-16 Budget estimates (BE). This is an improvement over the year-ago period as the deficit then stood at 100.2 percent of the 2014-15 BE.
The upcoming Budget, which will be presented on February 29, will see Finance Minister Arun Jaitley trying to balance pressures from the Pay Commission report, and his promise to lower corporate tax and raise capex
Moody's has said India's credit profile will be unaffected by a small slippage in fiscal deficit target as it expects the government to continue fiscal consolidation and target lower deficits every year despite headwinds from global slowdown.
"Falling crude oil price provide us a headroom for increasing excise duty on petrol and diesel. It will help in meeting fiscal deficit target of 3.9 percent for the current fiscal," said an official source.
People familiar with the matter say New Delhi is now setting more "realistic" targets for the fiscal year ending March 2017 having raised less then one fifth of the Rs 68500 crore (USD 10.2 billion) it had projected in 2015/16, the sixth straight year it will have missed the target
In the mid-year analysis tabled in Parliament, the government lowered the economic growth forecast for 2015-16 to 7-7.5 percent from 8.1-8.5 percent projected in February. It said slower-than-anticipated nominal GDP growth (8.2 percent versus budget estimate of 11.5) will itself raise the deficit target by 0.2 percent of GDP.
The 7th Pay Commission yesterday recommended increase in remuneration of about one crore government employees and pensioners which is estimated to impose an additional burden of Rs 1.02 lakh crore in 2016-17.