Budget 2009: fiscal deficit likely to increase

Budget 2009: fiscal deficit likely to increase
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First Published: Mon, Jun 29 2009. 04 30 PM IST
Updated: Thu, Jul 02 2009. 02 26 PM IST
Credit rating agency Standard & Poor’s says India’s fiscal deficit could increase by one percentage point of GDP over earlier projections.
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The new projected deficit is 6.5% of GDP, while the Interim Budget earlier this year had predicted India’s fiscal deficit would be 5.5% of GDP.
Standard & Poor’s based its assessment on then acting finance minister Pranab Mukherjee’s interim budget speech in February. Mukherjee had then said the new government would spend 0.5-1% of GDP on stimulus packages.
On Thursday, Mukherjee will present India’s Economic Survey before Parliament. The Economic Survey describes the country’s economic performance for the year ended 31 March.
There could be good news for some real estate developers. A poll by Edelweiss Capital shows property brokers across India expect home property prices to increase around budget time. Expectations are highest in Mumbai and Delhi.
Automakers want budget 2009 to retain the sops they received after last year’s financial crisis. They’re asking the government to continue the 4% cut in CENVAT and want it to cut excise duty to down 8% from 10%.
The government had announced two stimulus packages for automakers in December and January.
A new report by Morgan Stanley says markets could surge after the budget is announced next week. The study says investors expect a reform-oriented budget.
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First Published: Mon, Jun 29 2009. 04 30 PM IST