The fiscal deficit projections gets revised to 3.3 percent of GDP for the year 2018-2019 and for the current fiscal to 3.5 percent of GDP.
The new year budget for 2018-19 creates a proper balance between fiscal prudence and growth , and even a minute slippage in fiscal deficit has no material impact on overall economic strength of the nation.
William Foster , Vice President-Senior Credit Officer at Moody’s says that the revised fiscal consolidation path is modestly shallower as compared to the last road map , but does not fundamentally alter India’s overall fiscal strength.
Moody’s in one of the interview stated that India’s budget for the fiscal year ending March 2019 challenges a balance between fiscal prudence and growth.
It also added to it that even slightest slippage in the budget deficit targets would have no material impact on the country’s overall fiscal strength and is in line with Moody’s expectations to raise the progress bar.
Joy Rankothge, Vice President — Senior Analyst said that the current year budget would benefit corporates as well as infrastructure and insurance sectors.
Moody’s also expects that the government will meet next year’s deficit target , based on achievable budget assumptions and demonstrated commitment to fiscal prudence.
However, some ambitious revenue assumptions and uncertainty about some spending items could result in a shortfall to overall fiscal consolidation.
Foster also said that the projected expenditure restraint and strong revenue growth are likely to be broadly achieved , though some measures such as the rule guiding increases in Minimum Support Prices (MSPs) and ambitious GST revenue targets could result in some further slippage .
Finally , its time when the insurance market will get benefited from the launch of a national health scheme and the merger, and listing , of three state-owned insurers.