The slow and steady pace of deficit reduction - Chart Of The Day 28 February 2015 - Equitymaster
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The slow and steady pace of deficit reduction
Feb 28, 2015


One of the positives from today's budget was the government's honesty on the fiscal deficit front. The FM acknowledged the serious nature of the problem but chose to do a balancing act. He stated that the deficit could only be brought down at a slow pace given the big public investments lined up. However, he did present a realistic picture of the same. While maintaining this year's fiscal deficit target of 4.1% of GDP, the FM has projected a steady fall through till FY18. The projections (as a % of GDP) do seem to be achievable according to us. It will allow the FM enough headroom to fund large infra projects. At the same time, it will be important to rein in unplanned expenditure if the government is to stick to the targets.

Data Source: The Government of India

This Chart Of The Day was published in The 5 Minute WrapUp - Union Budget 2015-16: Did Jaitley make it or break it?

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1 Responses to "The slow and steady pace of deficit reduction"

Pradip Shah

Feb 28, 2015

Mr FM did a remarkable job of covering almost all sections of the society including middle class, presented more realistic projection.There were no big bang announcements as expected, but touched at the core nitty gritty.His focus on fiscal deficit,sharp increase in infrastructure spending, simplification of tax system, focus on affordable housing, spending on agriculture sector augurs well for kick starting the economy. The figures appears realistic as of now.

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