March 10, 2012 12:55:46 am
The World Bank on Friday said the Indian government is likely to miss the ambitious target for fiscal consolidation set in the 2011-12 budget of limiting fiscal deficit to 4.6 per cent of the GDP by about one percentage point due to lower-than-expected revenues and increasing outlays on subsidies.
In its India Economic Update,2012,the World Bank said the slow growth expected in core OECD countries added to the urgency of the worlds largest democracy overcoming its structural problems and enhancing domestic growth drivers. The key signals to spur growth could come from the reform of direct taxes,the implementation of the long-delayed goods and services tax (GST) and the passage of the land acquisition and mining bills,the World Bank said.
In a worsening international scenario,macroeconomic policy room is much more limited now than in 2008,said the survey and that fiscal stimulus could come from rationalising expenditure by expanding investment and cutting subsidies. Investments in infrastructure could address supply bottlenecks and bring private investment,with social safety nets cushioning the impact of rising prices.
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