Mumbai : Managing fiscal arithmetic after implementing seventh pay panel recommendations will be a challenge and there is a “real possibility” of Finance Minister Arun Jaitley delaying the fiscal consolidation plan again, Fitch said.
“The main issue for the budget will be fiscal issue, how are they going to manage the 0.5 per cent extra wage bill. Also, it would be interesting to see what the medium term fiscal consolidation looks like,” the ratings agency’s director Thomas Rookmaaker said. When asked if there is a possibility of the roadmap to achieve 3 per cent fiscal deficit target by FY18 being deferred, Rookmaaker said, “I think it’s a possibility. There would be some tough choices to be made by the government in the next budget, part of the choice will be the fiscal consolidation programme.”
Rookmaaker said India’s GDP growth is already high compared to other countries. “So growth is not an issue in India, while the fiscal situation is an
issue,” he said.
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)