Centre may opt for fiscal deficit range

Mumbai, Jan. 7: The narrowerthan- expected win in Gujarat and upcoming polls in other states will lead to a reorientation of priorities for the government with a greater focus expected on the farm and small businesses sectors, the head of Icra has said.

However, the increased spends which it may entail will have repercussions on fiscal deficit and the Centre may go for relaxed targets in the upcoming budget, Icra’s MD and CEO Naresh Takkar told PTI recently. “Gujarat was surprisingly difficult. The kind of hold which the PM and the BJP have over Gujarat, they may like to interpret the results more deeply,” he said.

“They still have 18 months, so the government should be in a position to re- orient its priorities. It is committed on reviving the economy and reforms, but the political outlook, ( of) which they will have a better understanding now, they would re- balance their priorities,” he added.

It will focus more on the rural sector and small businesses, Mr Takkar said, adding that the Gujarat verdict and upcoming polls will have a “significant” impact on the economic policymaking in the near future. The Centre will realign its priorities and with a desire to see early results, start spending as well, he said.

He, however, was quick to warn of the difficulties on the fiscal math as a result of such extra focus. “There is going to be a pressure. They may start looking at fiscal ( deficit) not as a hard- coded number but have some kind of a band within which they would like to operate rather than sticking to a headline number,” he said.