FY 2015 Interim Budget: Is the fiscal consolidation achievable?

FY 2015 Interim Budget: Is the fiscal consolidation achievable?

By Rajiv Kumar and Geetima Das Krishna
21 February 2014

The finance minister presented the interim budget in the parliament on 17th February, 2014. The full budget will be presented in June-July after the general election. The Finance minister ostensibly kept his promise and remained on the path of fiscal consolidation. The revised estimate for the FY14 fiscal deficit is at 4.6% of GDP vs. budgeted 4.8% despite significant shortfall on the revenue front. In FY15, the government has pencilled in a fiscal deficit target of 4.1% of GDP, marginally better than expected (4.2%). About 87% of this deficit will be financed by market borrowing (net borrowing: Rs 4.57 lakh crore). Both net and gross market borrowings (Rs 5.97 lakh crore) in FY15 are better than market expectation.