Fis­cal Deficit Tar­get for FY16 Achieved: Govt

The Economic Times - - Economy & Companies - Our Bureau

New Delhi: A day af­ter the fi­nan­cial year ended, the gov­ern­ment said it had achieved the fis­cal deficit tar­get for the year, putting an end to spec­u­la­tion af­ter Fe­bru­ary num­bers came in on the higher side, re­in­forc­ing the com­mit­ment to fis­cal dis­ci­pline ahead of the Re­serve Bank of In­dia (RBI) mone­tary pol­icy re­view sched­uled for April 5.

“As per ini­tial es­ti­mates, the fis­cal deficit for 2015-16 is ex­pected to be within 3.9%,” the finance min­istry said in a state­ment, adding that the gov­ern­ment re­mains com­mit­ted to fis­cal con­sol­i­da­tion. Data re­leased on Thurs­day showed that at the end of Fe­bru­ary, the fis­cal deficit stood at 107% of the re­vised bud­get es­ti­mates for the full year, rais­ing con­cerns that tar­get may be breached. Lower nom­i­nal GDP growth had made the fis­cal deficit tar­get dif­fi­cult, but the gov­ern­ment de­cided to stay the course, com­press­ing the deficit from the bud­get to the re­quired level to stay within the 3.9% of GDP pro­vided in the bud­get. The bud­get for the year FY16 had pegged the fis­cal deficit at .₹ 5.56 lakh crore, or 3.9% of GDP, as­sum­ing 11% growth in nom­i­nal GDP for the year. With ac­tual GDP growth now forecast at 8.6%, the ab­so­lute fis­cal deficit was re­vised down to .₹ 5.35 lakh crore in the bud­get for FY17 pre­sented on Fe­bru­ary 29.

“The dis­in­vest­ment tar­get of .₹ 25,000 crore vide 2015-16 RE has also been achieved,” the state­ment said. The gov­ern­ment said the fis­cal tar­get had been met with­out cutting devel­op­ment spend­ing.

“Plan ex­pen­di­ture for 2015-16 is ex­pected to be around .₹ 4,70,000 crore. This is higher than the Plan BE of 2015-16 and also higher the ac­tual plan ex­pen­di­ture in 2014-15,” the state­ment said.

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