"We expect Finance Minister P Chidambaram to meet the fiscal deficit target of 4.8 per cent of GDP for FY14, which he has defined as the 'red-line'," Standard Chartered said in a report today.
"We even see a possibility that the finance minister will positively surprise the market by announcing a deficit below 4.8 per cent," it added.
Standard Chartered has also projected the FY15 gross market borrowing at Rs 5.8-6 trillion or 4.2 percent of GDP.
The report said that non-tax revenues, including disinvestment proceeds, could surprise on the upside as dividend flows from state-run enterprises have been higher than anticipated.
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"We expect the government to end FY14 with dividend/ profit collection of 0.85 per cent of GDP, exceeding its target of 0.65 per cent," the report said.
The report expects the government to trim expenditure by 0.55 per cent of GDP to meet the fiscal deficit target.
In the run-up to the general elections, Chidambaram will present the vote-on-account next Monday.
The market participants will closely watch the FY15 fiscal deficit target, which will determine the size of market borrowing for the next fiscal year, according to the report.