Union Budget 2018: All Eyes On The Fiscal Deficit

The fiscal deficit is one piece of data that is eagerly watched by credit rating agencies and investors alike. In fact, stock market investors keenly watch this number and in the past when this number is spoken about the indices turn volatile.

For the common man or Aam Admi this is one of the least of his concerns. Last year the government had announced a fiscal deficit of 3.2 per cent of GDP for 2017-18. That in all probability is unlikely to be met.

Some estimates suggest that the fiscal deficit could end-up at 3.5 per cent. While this maybe a well known fact what would eagerly be watched would be the projection of fiscal deficit for 2018-19. The government had planned to stick to 3 per cent in 2018-19. That is unlikely to be maintained for one simple reason: elections in 2019.

This means that this would be the last full fledged budget of the present dispensation and they would need to go out and spend. In doing so, the fiscal deficit could expand. While the government may plan to keep a lower fiscal deficit, it is most likely that the same may not be achieved.

One will have to wait and watch what happens in the coming years.

GoodReturns.in

Story first published: Saturday, January 20, 2018, 7:09 [IST]

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