Fiscal deficit declines from 4.9% of GDP in FY2013
India's fiscal deficit has declined to 4.5% of GDP in FY2014 against 4.8% of budget estimates in February 2014 and 4.6% of revised estimates in February 2014. The fiscal deficit has also declined from 4.9% of GDP in FY2013.Commenting on the fiscal deficit number, Aditi Nayar, Sr. Economist, ICRA said, "the compression in the fiscal deficit was largely made possible by a curtailment of plan revenue expenditure. The contraction in excise duty collections is a reflection of the stagnation in the manufacturing sector in 2013-14."
She expects the new Government to announce its fiscal consolidation plan, specifying annual targets and an overall time frame for compressing the fiscal deficit to 3% of GDP, while pressing that the focus on fiscal consolidation should not be narrowly interpreted as achievement of annual declines in the ratio of fiscal deficit to GDP.
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