New Delhi: Expecting the upcoming Budget to stay firm on the fiscal consolidation roadmap, brokerage firms believe that higher allocation can be made for capital expenditure amid a sharp decline in oil subsidy bill.
“We expect the government to continue on path of fiscal consolidation, budgeting for fiscal deficit of 3.6 per cent of GDP in FY16, down from 4.2 per cent in FY15 based on new GDP figures,” Religare Capital Markets CEO Gautam Trivedi said.
“However, unlike past years, revenue and expenditure targets need to be realistically framed. Also, credible fiscal consolidation strategy is highly anticipated and required,” he added. In the past, fiscal math has often come under pressure due to assumption of a higher growth in tax collections. In a pre-Budget note to investors, Morgan Stanley also said that it expects the government to stay committed to the path of fiscal consolidation.
“We believe that the key to track in the Budget is the government’s commitment to the fiscal consolidation path,” Morgan Stanley’s Chetan Ahya said. “We believe Mr Jaitley will maintain the fiscal deficit reduction roadmap as per medium-term fiscal policy and target to reduce fiscal deficit to 3.6 per cent.”
