The positive in the budget is that government capital expenditure will be 1.8 per cent of gdp, higher than the average of 1.6 per cent we have seen in recent years.
The fiscal deficit target of 3.5 per cent of gdp is unlikely to be met. Disinvestment and telecom revenues are likely to fall short. No provision has been made for bank recapitalisation, my guess is some amount will be required. Expect fiscal deficit to end up at around 3.7 per cent of gdp.
None of the structural reforms mentioned in the Economic Survey have been addressed. There's no overhaul of governance in public sector banks, no mention of a Temaske-like entity for PSUs. ( I happen to think the latter is unrealistic in our situation). Status quo on land acquistion, labour laws.
There's more focus on specific projects in mission modes. That's where the PM excels, a prime example being Swaccha Bharat. Better to focus on projects that can make an impact on the ground instead of expecting a miracle on the macroeconomic front.
My detailed analysis in the Hindu of Feb 2.
The fiscal deficit target of 3.5 per cent of gdp is unlikely to be met. Disinvestment and telecom revenues are likely to fall short. No provision has been made for bank recapitalisation, my guess is some amount will be required. Expect fiscal deficit to end up at around 3.7 per cent of gdp.
None of the structural reforms mentioned in the Economic Survey have been addressed. There's no overhaul of governance in public sector banks, no mention of a Temaske-like entity for PSUs. ( I happen to think the latter is unrealistic in our situation). Status quo on land acquistion, labour laws.
There's more focus on specific projects in mission modes. That's where the PM excels, a prime example being Swaccha Bharat. Better to focus on projects that can make an impact on the ground instead of expecting a miracle on the macroeconomic front.
My detailed analysis in the Hindu of Feb 2.
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