Finance secretary Arvind Mayaram said on Monday that while achieving the FY15 fiscal deficit target of 4.1% of gross domestic product (GDP) was a “tough task”, the government will be able to meet it given that there are clear signs of the economy picking up.
“We will contain the fiscal deficit at 4.1%. It is a tough task but there are clear signs of the economy picking up. The government has taken a large number of bold decisions and the Budget has been well received. We will see buoyancy in revenue,” Mayaram told reporters.
Finance minister Arun Jaitley, in the Budget speech, announced a host of measures, including hiking tax exemption limit, incentives for the housing sector and relief in indirect taxes on auto and other sectors to promote industrial output and boost growth.
On the deficit being 56%of the FY15 target in the April-June quarter, Mayaram said: “To react to the monthly deficit numbers is not correct. In certain months, government expenditure is higher. In those months, it is not necessary that revenues will also be higher.”
After remaining at sub-5% in the last two fiscal years, economic growth in the ongoing fiscal year is estimated to be between 5.4-5.9%, according to estimates by the Reserve Bank of India.
Speaking on the rupee, which fell to a four-month low of 61.18 on Friday, Mayaram said that it was in sync with Asian currencies, which also saw a drop last week due to a weakness in the US markets. He added that the depreciation of the rupee was a cyclical syndrome and the government was confident that it would recover.
After the four-month low on Friday, the rupee on Monday rose 25 paise in its biggest gain in three weeks to end at 60.93 against the greenback as shares soared ahead of the RBI policy meet and exporters offloaded dollars.