Budget 2013: The spirit is willing, but the fisc is weak
What this means is as a percentage of the GDP, government expenditure is set to rise again — to 14.6% — after declining steadily from the 2009-10 peak of 15.9% to 14.3% in 2012-13. The economic growth the minister assumed came into question later in the day though, with the Central Statistical Office saying third quarter GDP growth was a disconcerting 4.5%.
The finance minister obviously thinks the economy is bottoming out and at least from the first quarter of next fiscal, growth would pick up. Several incentives announced in the Budget to stimulate the investment cycle, he hopes, could help accelerate the growth momentum during the course of next year. While Prime Minister Manmohan Singh said the Budget laid the road map for investments, the Opposition called it “lacklustre” and “unimaginative”.
The Budget pegged the fiscal deficit at 5.2% for this year and 4.8% in 2013-14, despite the higher-than-expected