Budget 2016: Fiscal Framework: Review medium-term fiscal stance

Fiscal hawks might not like it but the Budget 2016 has made a case for reviewing the medium-term fiscal framework in the upcoming Budget News. It, however, has argued that there were “good” arguments for both relaxing the fiscal deficit target and keeping it.

The framework mandates the government to cut its fiscal deficit to 3.5 per cent of the country’s gross domestic product (GDP) next financial year and 3 per cent by 2017-18 from the targeted 3.9 per cent in the current financial year.

Budget 2016: Subsidies: Plug subsidy leaks to help fiscal consolidation

If lower tax rate is equivalent to subsidising, the National Democratic Alliance government is clearly targeting the 'well-off' segment of the population. Unlike the previous years, the Budget 2016 has dealt with the issue of subsidy by giving only a box on petroleum subsidies, while devoting a chapter with nine-and-a-half pages to 'Bounties for the Well-Off'.

Read more from our special coverage on "BUDGET 2016"

• Budget News
• Budget Photos
• Budget Discussion

RBI decision on expected lines: FinMin

Economic affairs secretary Shaktikanta Das on Tuesday said RBI's move to keep the policy rate intact was on the expected lines.

He said one has to wait for the Budget to know the government strategy on the fiscal consolidation road map. The Budget is expected to be tabled in Parliament on February 29.

Read our full coverage on Union Budget 2016

The finance ministry is grappling with the issue of fiscal consolidation road map. It has received all sorts of advices-- to defer the road map by one more year, stay on the path and not to tie itself with any fiscal deficit number.

As RBI expected inflation would be 5% in FY17, Das said one has to see how inflation turns from here.

Budget 2016, Banks want govt to focus on public spending over fiscal deficit road map

Banks and financial institutions pitched for a delay in the fiscal deficit road map and for more focus on greater public spending to ensure economic revival, at a Budget 2016 meeting with Finance Minister Arun Jaitley on Tuesday.
The institutions also wanted incentives to encourage cashless transactions through debit/credit cards and rationalisation of interest rate of small savings schemes.
Read our full coverage on Union Budget
The two-hour meeting saw heads of the country's public and private sector banks - including State Bank of India, Axis Bank, Bank of Baroda, ICICI Bank, LIC, IIFCL, IDBI Bank, NABARD, Citi Bank and L&T Finance Holdings - discuss key measures that could be introduced in the Budget 2016-17 to ensure economic growth revival.