No material impact of slippage in fiscal deficit: Moody’s

TIL Desk/Business/New Delhi/ The Budget for 2018-19 strikes a balance between fiscal prudence and growth, and a “slight” slippage in fiscal deficit has no material impact on overall economic strength.

The government has revised its 2018-19 fiscal deficit projections to 3.3 per cent of GDP and for the current fiscal to 3.5 per cent of GDP, against original targets of 3 per cent and 3.2 per cent, respectively.

“The revised fiscal consolidation path is modestly shallower than the previous roadmap, but does not fundamentally alter India’s overall fiscal strength,” says William Foster, Vice President-Senior Credit Officer at Moody’s.

The medium-term target to reduce the central government debt-to-GDP ratio to 40 per cent is supportive of the sovereign credit profile, Foster said. Moody’s in a statement said India’s budget for the fiscal year ending March 2019 strikes a balance between fiscal prudence and growth.

“Slight slippage in the budget deficit targets has no material impact on the country’s overall fiscal strength and is in line with Moody’s expectations,” it said. The budget benefits corporates as well as infrastructure and insurance sectors, said Joy Rankothge, Vice President — Senior Analyst.