The best thing Mr. Jaitley has done is he has not tinkered too much, especially with indirect taxes and has gone with the flow which have made the markets buoyant. Overall, the economy is going in the right direction with a fiscal deficit of 3.2%.
The customary post-Budget address of the Finance Minister before the boards of the two regulators comes against the backdrop of the government pegging fiscal deficit at 3.2 percent of GDP for the financial year ending March 2018.
Government projects fiscal deficit target of 3.2%, in line with market consensus. FY18 Revenue deficit pegged at 1.9%, below FRBM mandated level of 2.0%. Focus of the Budget on Investment and Consumption revival
GDP for Budget Estimate (BE) 2017-2018 has been projected at Rs 1,68,47,455 cr assuming 11.75% growth over the Revised Estimates (RE) of 2016-2017 (Rs 1,50,75,429 crore). Fiscal deficit for 2017-18 is targeted at 3.2% of GDP and the government remains committed to achieve 3% in the following year
Affordable housing being given Infrastructure status is a welcome move and will help in the Housing to all by 2022 mission it is a big and positive move for developers, banks and housing finance companies.
The Budget has a positive tone and is in the right direction. The focus on the infrastructure and manufacturing sector will benefit lubricant manufacturers, since we expect this to boost consumer demand in the B2B and B2C market segments.
Along with experts interpreting the budget, Girija Pande, chairman of the Singapore-based Apex Avalon Consulting Pte Ltd, also applauded the decision to abolish Foreign Investment Promotion Board (FIPB), saying it had "long outlived its utility and was a hurdle to large foreign investments into India".
The Budget presented today focusses on ramping up spending on infrastructure, provides the necessary impetus to Housing for All program and continues the structural reforms initiated couple of years ago.
A big infrastructure push along with a substantial hike in provisions for the National Highways in the Union Budget for 2017-18 is a major takeaway and I congratulate the Finance Minister for the growth oriented approach.
Finance Minister Arun Jaitley presented the Budget for next fiscal in Parliament yesterday in which he planned to cut fiscal deficit to 3.2 percent and 3 percent of GDP for next financial year and 2018-19 respectively. The deficit in the current fiscal is estimated to be 3.5 percent of GDP.
Despite the demons of demonetisation resulting in reduced consumption and consequently slowdown in the economy, the fiscal deficit was maintained below the targeted level for FY17 at 3.2% and has targeted to maintain at 3.2% for FY18 and at 3.0% in FY19.
Budget took a small pause on fiscal consolidation by targeting fiscal deficit @ 3.2% for FY18, 20bps higher than planned in the governments medium term fiscal consolidation program. The lower reduction in fiscal deficit is to stimulate demand in a weak economic environment post demonetisation a step in right direction.
The government pegs FY18 fiscal deficit target at 3.2% of GDP, lower than 3.5% for FY17, but slightly higher than the self-committed target of 3% of GDP. Since primary deficit and debt-to-GDP ratio are likely to narrow next year, we do not find a breach in the deficit target concerning.