It is unlikely that the government may slip on the fiscal deficit target for one more year because it may impact their credibility, says Samiran Chakraborty, Chief Economist and Surendra Goyal, Head of Research, Citi India.
In a special interview to CNBC-TV18's Latha Venkatesh, Samiran Chakraborty, Chief Economist and Surendra Goyal, Head of Research, Citi India decode the Budget impact on the economy, financial markets and earnings etc.
According to Chakraborty, the fiscal deficit, the borrowing numbers announced in the Union Budget were in-line with the market expectations. However, there were couple of other things which is difficult for bond markets to take a sanguine view – one is how much the MSP increase is going to be and the inflationary impact of that going forward and how it might affect the RBI’s rate decision.
The other questionable thing for bond markets is the very high GST collection estimates and the revenue expenditure estimates for government, he added. Moreover, the global markets currently are also a bit uncertain and bond markets are reacting more negatively than what they would have otherwise done by looking the borrowing numbers, which have been in-line.
Going forward, he said it is unlikely that the government may slip on the fiscal deficit target for one more year because it may impact their credibility.For more, watch video
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