Govt to achieve 3. 5% fiscal deficit target for fy17 from spectrum auction

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Government may yet again opt for stretching the target, and pegging 3.8-3.9% as the likely number. Government can achieve 3.5% fiscal deficit target for 2016-17 from spectrum auction, says


India Ratings ahead of the Union Budget amid concerns over the fiscal consolidation roadmap. "There is a possibility of government making a windfall gain in its non-tax revenue account


in case the spectrum sale takes place in FY17. This may help the government to adhere to 3.5% fiscal deficit target of FY17, despite the burden of implementing seventh central pay commission


award," it said in a note. Implementing the recommendations of 7th Pay Commission, suggesting 23% hike in government staff's salaries, is expected to dent the fiscal math by 0.6%


of GDP, which has resulted in high speculation over the strategy Finance Minister Arun Jaitley adopts in the Budget 2016-17, to be presented on Monday. Some analysts are saying that the


government may yet again opt for stretching the target, and pegging 3.8-3.9% as the likely number. The domestic ratings agency said that the Indian industry will also be keenly looking at


the fiscal stance of the government, specifically for details on how additional spending can result in more capital investments. It flagged that while capital expenditure increased in


FY15's revised estimates, it is still stuck at 1.7% of the GDP and there is a need to push it to 2%. It said there is a likelihood of fiscal slippage in the current fiscal to 4.1% (as


against the targeted 3.9%) due to lower than anticipated GDP growth.