The Government is likely to meet its fiscal deficit target of 4.1 per cent GDP for the current financial year, says global brokerage firm Citigroup.The fiscal deficit target of 4.1 per cent of GDP for 2014-15 is likely to be met though the fiscal trends are "weak", it said.As per the data released by Controller General (CGA) of Accounts, India's fiscal deficit overshot the budget estimate of Rs 5.31 lakh crore by December-end.
However, a "compression" in plan expenditure coupled with a pick-up in divestments, would likely help the Government meet its 2014-15 fiscal deficit of 4.1 per cent of GDP, it said."We believe the fiscal deficit roadmap of 4.1 per cent, 3.6 per cent and 3 per cent of GDP in FY15-FY17 will likely be adhered to thanks to imminent revenue and expenditure reforms, lower crude and an uptick in growth," Citigroup India economist Rohini Malkani said in a research note.
The fiscal deficit during April-December period was Rs5.32 lakh crore or 100.2 per cent of the 2014-15 estimate, mainly because of subdued revenue realisation.The fiscal deficit the gap between Government expenditure and revenue during the same period last year was at 95.2 per cent of that year's target.
"While there is some chatter of additional spending to prop up growth, we expect the government to largely adhere to its roadmap on three key factors expenditure side reforms in areas of direct benefit transfers; pick-up in growth; improved tax buoyancy and decline in crude prices, which will help lower both fuel/fertiliser subsidies," the report added.
Meanwhile, the Coal India stake sale by Government may help the exchequer garner about Rs22,600 crore and provide some cushion to it. More disinvestment in blue chip PSUs are likely to take place in the two months.