In a hope to get rid of a threatening ratings downgrade and boost fiscal credibility, finance ministry is expected to pencil in fiscal deficit at 5.3 per cent for this year, which is seen improving at 3 per cent by 2016-17, in its soon-to-be-unveiled fiscal reforms blueprint.
Finance ministry officials are functioning overtime to safeguard that a widely anticipated fiscal slippage this year is minimal and not much beyond the budgeted 5.1 per cent that they contend could go a prolonged approach in satisfying international ratings agencies that have threatened a hillside of India’s emperor rating to junk status.
Meanwhile, Finance Minister P Chidambaram, who has betrothed a 'credible and feasible path of fiscal correction', has been personally fine-tuning the proposed fiscal framework for the next five years that will be presented in the forthcoming winter session of Parliament.
Further, having shot a diesel price hike bullet which is expected to reduce ballooning subsidies burden, the finance ministry is now focusing on a three-pronged strategy comprising massive expenditure cuts, aggressive disinvestment, and large receipts from the sale of telecom spectrum to achieve the fiscal numbers.
