Fiscal deficit estimates are unconvincing
Deficit correction has been envisaged through increase in indirect taxes -- mainly service tax, and non-tax revenues (primarily through sale of telecom licences). Expenditure cutbacks are expected to come about through reduction of major subsidies. The reliance on indirect taxes has inflationary potential.
There is no evidence of expenditure rationalisation in the Budget, except for the proposed amendment to the introduction of a Medium Term Expenditure Framework. However, the efficacy of such a policy measure (considering that the next Budget will be a pre-election one) seems open to doubt. Deficit targets will once again not be met. The year 2012-13, compared with 2011-12, is not expected to see any dramatic changes in economic growth on the domestic or global front. Growth and fiscal outcomes will be similar, except for some improvements on the revenue side (taxation).
To maintain the budgeted deficit numbers, the government will resort to cutbacks in Plan expenditure, leading to reduction in developmental expenditure. In addition, on account of market uncertainties, disinvestment proceeds may not be fully realised. Keeping in view the past years' experience of sale of telecom licenses, the amount expected to be raised this time around looks over-optimistic.
The budgeted fiscal deficit at 5.1 per cent may slip further to 5.5 per cent of GDP.
more budget videos
Date 18-07-14 4:25
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Date 10-07-14 5:04
Tooltip Information:Politicos on Union Budget 2014-15Video by:Description: New Delhi, July 10 (ANI): Political leaders on Thursday reacted over Finance Minister Arun Jaitley's maiden Budget which he presented in the Lok Sabha. SP Chief Mulayam Singh Yadav slammed the budget saying that it is only for the rich not for the poor or unemployed. NCP, JD (U), CPI (M) and BSP too criticized the budget.Rating: 4Views: 8
Date 10-07-14 2:40
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Date 10-07-14 4:36
Tooltip Information:Arvind Kejriwal slams Union Budget 2014-15Video by:Description: New Delhi, July 10 (ANI): Aam Aadmi Party Chief Arvind Kejriwal on Thursday criticized the Union Budget 2014- 15 presented by Finance Minister Arun Jaitley in the Lok Sabha. Talking to mediapersons, Kejriwal said that Prime Minister Narendra Modi did nothing to check inflation and rising prices.Rating: 4Views: 37
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Date 23-02-14, Duration 1:43, Views 42851
Date 23-02-14 1:43
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Date 26-04-14 4:34
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Date 11-04-14 3:09
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Date 10-04-14 0:55
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Date 1 hr ago 5:23
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Date 2 hrs ago 1:50
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