While presenting the Union Budget, Finance Minister Arun Jaitley said the country will stick to the fiscal deficit target of 4.1 percent of gross domestic product (GDP) set by the previous government for the year ending March 2015.
Jaitley added the fiscal deficit would narrow to 3.6 percent of GDP by fiscal 2015/16 and to 3 percent by 2016/17.
Below are analyst comments on the budget.
UPASNA BHARDWAJ, ECONOMIST, ING VYSYA BANK, MUMBAI:
"Overall, the budget seems to have delivered in line with market expectations, with adequate focus on infrastructure and measures to boost financial savings. Though, more clarity on the roadmap to GST would have been welcome."
A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI:
"The same set of problems continue from the past two years. The tax numbers look very optimistic, the spending numbers look very high. So we will have to see how they go about managing it.
The range is to keep the fiscal deficit the same as the interim budget. The numbers appear to be unrealistic but we have to give the benefit of doubt since it's a new government."
MURTHY NAGARAJAN , HEAD - FIXED INCOME, QUANTUM ASSET MANAGEMENT, MUMBAI.
"These measures are very progressive and good for the bond and equity markets. It would lead to reduction of inflation in coming years due to lower fiscal deficit. The government has increased FDI in defence to 49 percent to increase local indigenous production and save precious foreign exchange. These measures will reduce current account deficit in the long run. This should lead to the currency remaining relatively stable in the long run as current account deficit will be at manageable levels. Overall, the government has given a roadmap which it intends to work on over the next five years and increase the supply of goods and services in the economy."
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI:
"Contrary to almost everybody's expectations, the government intends to meet the fiscal deficit to GDP target of 4.1 percent in FY15 despite two years of very low growth, huge subsidy arrears and lingering threats of monsoon failure and oil price shock. It shows the government's firm commitment to support the RBI in inflation control and management. However, the underlying dynamics of growth-inflation trade-off suggests that we may not see much elevation in growth during FY15. This message was also loud and clear in yesterday's Economic Survey that has suggested a period