Interim Budget reflects good intentions: S&P

Standard & Poor’s, the international rating agency, said on Wednesday that India’s interim Budget indicates a greater determinatio...

Standard & Poor’s, the international rating agency, said on Wednesday that India’s interim Budget indicates a greater determination to curb fiscal deterioration, and pointed out that the country’s credit ratings are constrained by high public debt burden and fiscal inflexibility.

‘‘Nevertheless, the mini Budget must be seen in the context of the anticipated General Elections as well as strong growth,’’ an S&P press release said here. The budget deficit for 2003-04 is estimated to reach 4.8 per cent of Gross Domestic Product from 5.4 per cent in last year, but more importantly, the same for 2004-05 has been boldly projected at 4.4 per cent of GDP, it said.

Measures to meet this target include increasing tax revenue by 17.4 per cent and limiting expenditure growth to 3.5 per cent, the rating agency added. ‘‘While these projections are based on expectations of 8 per cent GDP growth, it is a positive sign that the looming general election has not led to a significant loosening in fiscal policy’’, S&P pointed out. Despite more modest pre-election tax concessions, the outlook for reducing the deficit appears more upbeat than it has in recent years, it said.

India’s ratings are constrained by the high public debt burden and fiscal inflexibility, with the consolidated general government deficit at more than 9 per cent of GDP, it said. The ratings could improve if the government can press on with reforms, including reversing the fiscal trajectory by implementing plans to reduce deficit and accelerate structural reforms to sustain economic growth, the rating agency added.

Algerian-French artist’s work vandalised at Kochi art gallery over ‘obscenity’ allegations

India45 min ago

Algerian-French artist Hanan Benammar's linocut prints were vandalised by two artists at an international exhibition in Kochi. The exhibition, curated by Anushka Rajendran and Damian Christinger, was organised by the Kerala Lalithakala Akademi and opened on October 18.

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