Finance secretary Arvind Mayaram said Moody's has noted the uptick in growth. There is an expectation that FY15 growth could be 5.7-5.9%. Due to which, post October, revenue buoyancy is expected to kick in.
Clearly like every rating agency, the concerns raised by Standard & Poors in terms of the India Budget numbers are primarily on two fronts; the economic growth rate expected for current financial and how achievable is the fiscal deficit target.
According to GEPL Capital, the budget was positive & showed the Governments intent to achieve the Fiscal Deficit target of 4.1% in FY15 & control expenditures. Fiscal Deficit prediction is 3.6% for FY16 & 3% for FY17, says the report.
The sharp fall was attributed to absence of subsidy rationalisation, unrealistic fiscal deficit target of 4.1 percent for FY15 set by Finance Minister Arun Jaitley in his maiden Budget, not so reformist Railway Budget, fiscal crisis in Europe, issue of GAAR and unwinding of long positions, say experts.
Emkay Global Financial Services has come out with its review on budget 2014-15. The budget talks about containing fiscal deficit, it has tried to safeguard the pro-poor slant. Fiscal deficit target of 4.1% for FY15 retained, aim to bring it down to 3% by FY17, says the report.
Accepting a task of reducing fiscal deficit target to 4.1% of the GDP in the current year followed by 3.6% for 2015-16 and 3% for 2016-17 indicates fiscal prudence and consolidation through various policy measures.
Religare Retail Research has come out with its highlights on Union Budget 2014-15. According to the research firm, the govt. Aim to achieve 7-8% economic growth rate in next 3-4 years. However, Aiming Fiscal Deficit of 3% in FY16-17.
One cannot be sure the final budget numbers will all add up, for Jaitley has taken a gamble: he has gambled that he will boost growth to reduce his fiscal deficit, and not immediately cut expenditures it to bring finances in order. In this way he has done the opposite of what Chidambaram did.
According to Taimur Baig, if there is a huge pickup in economic buoyancy that raises tax revenues and if global fuel prices fall severely then there may be a slight change to achieve a fiscal deficit target of low 4 percent
There are always ways to reach the 4.1 percent fiscal deficit number but there are questions on the revenue assumptions, says Sonal Varma India Economist Nomura Financial Advisory & Securities (India).
JP Morgan says Budget strikes a middle path between fiscal consolidation and promoting medium-term growth. The fiscal deficit target remains at 4.1 percent without taking recourse to large asset sales.
Prime Minister Narendra Modi's new government on Thursday unveiled a maiden Budget that seeks to revive growth and curb borrowing, but left open questions on how it would reduce the fiscal deficit and restore investor confidence.