Will India miss fiscal deficit target? Ace equity investor Chris Wood has this advice for Modi govt

By: |
Published: December 11, 2019 1:10:06 PM

Amid the ongoing talks about the government possibly missing the budgeted fiscal deficit target, Chirs Wood said a timely announcement by the government on deficit may help.

rupee, dollarThe stock markets are not expected to see a big sell-off as a result, since it has already been assumed, Christopher Wood, global head of equity strategy at Jefferies said.

Amid the ongoing talks about the government possibly missing the budgeted fiscal deficit target, Chirs Wood said a timely announcement by the government on deficit may help, ET Now reported. If the government announces that the fiscal deficit target may get breached since the slowdown is much bigger than anticipated, both stock and bond markets are expected to take relief out of it, Christopher Wood, global head of equity strategy at Jefferies, told ET Now. The stock markets are not expected to see a big sell-off as a result, since it has already been assumed, he added.

The fiscal deficit has hit 102 per cent of the budget estimate till October, surpassing the full-year target set by the Modi government. The deficit touched 102.4 per cent of the FY20 budget estimate at Rs 7.2 lakh crore in the first ten months so far, the government data showed. On concerns over the government overshooting the 3.3 per cent target for FY20 owing to the corporate tax cut and the lower-than-expected tax buoyancy, Nirmala Sitharaman recently said: “Let the RE (revised estimate) stage come and we shall take a call on the fiscal deficit.” The government has so far been maintaining that the deficit target will be adhered to, Nirmala Sitharaman added.

Also read: Share Market LIVE: Yes Bank share price plunges despite $500 million capital raiser; Sensex up

Meanwhile, after the RBI slashed India’s GDP growth outlook for 2019-20 downwards to 5%, from 6.1% earlier, veteran equity strategist Chris Wood observed that India has seen the most surprising collapse in growth. ” India has seen the most surprising collapse in growth, the repercussions of the NBFC issue has impacted growth,” Chris Wood added.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1Next round of India-Chile PTA expansion talks seek wider trade basket
2Sushil Modi replaces Nirmala Sitharaman as head of GoM on IGST settlement
3RCEP pullout: Asymmetry in FTAs on govt radar, says Piyush Goyal