Key Points
A lower-than-expected fiscal deficit target in India's budget came as a surprise, even as it was expected to be fiscal-centric, the chief economist of credit rating agency ICRA told Reuters on Friday...
"We had expected fiscal deficit at 5.3% of gross domestic product (GDP)," Aditi Nayar, also the head of research and outreach at Gurugram-based ICRA, told the Reuters Trading India Forum...
The government aims to reduce its fiscal deficit to 5.1% of GDP, down from a revised 5.8% for this financial year, and plans to borrow a gross 14.13 trillion rupees ($170.52 billion), against expectations of 15.60 trillion rupees...
The gross borrowing was surprisingly lowered as the government anticipates repaying a chunk of maturing debt through the Goods and Services Tax compensation fund, budget documents showed...
Nayar also expected the Reserve Bank of India to begin cutting rates in August or October, depending on the quantity and quality of rainfall in the country...
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