Budget 2014: Fiscal deficit target for 2015-2016 set at 3.6%, says Arun Jaitley

NEW DELHI: Stating that he is taking up the fiscal deficit target as a challenge, Finance Minister Arun Jaitley in his maiden Budget speech said, "We will try to meet the fiscal deficit target set for us."

"I have set a fiscal deficit target of 3.6% for 2015-2016," Jaitley said. "We need to introduce fiscal prudence. Fiscal prudence is of paramount importance. We cannot leave behind a legacy of debt," Jaitley stressed.

According to Jaitley, the Budget 2014 is only a step in the direction of economic recovery. Jaitley said, "We shall leave no stone unturned in creating a vibrant India."

"The steps I will announce are only a beginning towards 7-8% growth to be achieved in the next few years," Jaitley said. "We look forward to lower levels of inflation. The country is in no mood to suffer from unemployment. Continuing slowdown has posed threat to global economy. There are green shoots of global growth that are emerging," Jaitley said. Jaitley began his speech by saying, "The people of India have voted for a change. India unhesitatingly desires to grow."

India's fiscal deficit, a measure of the extent to which a government is spending beyond its means, has already hit 45.6% of the budget. Stressing on the need for fiscal consolidation, the Economic Survey for the year 2013-2014 on Wednesday said that subsidy reforms are essential to keep the fiscal house in order. "Raising the tax-GDP ratio is essential for fiscal consolidation," the survey added.

Prime Minister Narendra Modi-led NDA government has taken over an economy in shambles. Ailing with a decade low sub-5 per cent economic growth and above-comfort inflation, the new government is faced with the daunting task of repairing an economy without the luxury of enough revenue in its coffers.

The balancing act between fiscal prudence and stimulating growth is tough one to pull off.