February 3, 2022 4:55:22 a.m.
- Assess whether the impact of investment spending growth is sufficient to offset higher-than-expected deficits and keep the debt ratio on a slightly declining path
- Beyond the investment campaign, budget short of major growth-enhancing structural reform announcements
- India has limited fiscal space as the country has the highest general government debt ratio of any BBB-rated emerging market sovereign.
- Overall borrowing is expected to be high although lower than budgeted, which could put pressure on the bond market
- Divestment proceeds at `65,000 crore lower than markets expected but reasonable
- Investment target achievable despite its high level once Air India’s miscellaneous expenses are removed
- Traditional priorities accompanied by new segments such as sovereign green bonds, digital rupee, clean energy, etc.
- The pace of consolidation will be gradual, from -6.9% of GDP estimated for FY23 against -6.8% budgeted to -6.4% for FY22
- Modest divestment projections ‘biggest element of surprise in (budget) calculations’
- Large fiscal deficit and continued heavy reliance on the bond market to fund government borrowing to create upward pressure on the bond yield
- The government continued to focus on supply-side reforms
- No significant increase in central government spending compared to FY21-23 budget forecast
S&P Global Ratings
- FY23 budget, a government effort to support economic recovery, but fiscal consolidation ‘would be a big challenge for policymakers going forward’
- State-level deficits could increase pressure on the measure of the general government budget deficit
- Aggressive procurement to help restore the economy is expensive
📣 The Indian Express is now on Telegram. Click on here to join our channel (@indianexpress) and stay up to date with the latest headlines
For all the latest economic news, download Indian Express app.
- The Indian Express website has been rated GREEN for credibility and reliability by Newsguard, a global service that rates news sources on their journalistic standards.
© The Indian Express (P) Ltd