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  1. India’s ‘less aspiring’ fiscal consolidation strategy negative for ratings: Fitch

India’s ‘less aspiring’ fiscal consolidation strategy negative for ratings: Fitch

Finance Minister Arun Jaitley has announced a budget that put boosting growth before painful reforms, slowing the pace of fiscal deficit cuts...

By: | Mumbai | Published: March 2, 2015 12:08 PM
Union Budget 2015, Arun Jaitley, Fiscal deficit

Finance Minister Arun Jaitley addressing the post annual budget press conference in New Delhi. Jaitley has announced a budget that put boosting growth before painful reforms, slowing the pace of fiscal deficit cuts. (PTI)

India’s budget could have been more ambitions on the fiscal front, especially given a high public debt burden, and the less aspiring fiscal consolidation strategy is negative for ratings, an analyst at Fitch Ratings said on Monday.

Finance Minister Arun Jaitley on Saturday announced a budget that put boosting growth before painful reforms, slowing the pace of fiscal deficit cuts and seeking to put domestic and foreign capital to work.

“The medium-term fiscal consolidation strategy is less aspiring than in the past, which is negative from a sovereign rating perspective,” Thomas Rookmaaker, director at Fitch’s Asia-Pacific Sovereign Group wrote in an email.

“If disinvestment would be treated as a “below the line” financing item, as is international best practice, instead of a revenue item, the fiscal deficit would actually rise from 4.3 per cent in FY15 to 4.4 per cent in FY16,” he added.

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Tags: Union Budget
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