Fiscal Deficit Targets Kept at 3.9 Percent This Year, 3.5 in 2017
"The coming year is expected to be a challenging one from the fiscal point of view because of challenges posed by a lower-than-projected nominal GDP growth," said the survey, which was presented in parliament on Friday.
"The chances of India's growth rate in 2016-17 increasing significantly beyond 2015-16 levels are not very high, due to likelihood of persistence of global slowdown," it said.
"The implementation of the Pay Commission recommendations and the 'One Rank One Pay' scheme will put additional burden on expenditure," it added.
Moody's Investors Service said earlier this month that India's fiscal position will remain weaker than other emerging economies in the near term even if fiscal consolidation continued on course.
"Even if the budgetary consolidation continues, India's fiscal metrics will remain weaker than rating peers in the near term, because of the relatively high levels of deficits and debts of India's state and central governments," Moody's said in a report.
"The importance of the upcoming budget lies in its message on the government's fiscal consolidation plans," the American agency said.
"But at around 63.8 percent of GDP, India's government debt ratio remains high compared with a median of 49.5 percent for Baa3-rated peers. Without continued fiscal consolidation, India's government finances will continue to compare poorly with the peers," it added.
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