The Indian economy is facing external pressures from rising fuel and fertiliser import costs due to the West Asia crisis, though the GDP growth momentum remains strong, supported by resilient domestic consumption.
Government sources told PTI on Tuesday that the FY27 Budget had taken into cognisance the uncertainties in the global economy around tariffs, and the government do not immediately need to account for additional borrowing or bring in supplementary demands for grants in the upcoming monsoon session of Parliament.
On the fiscal deficit front, sources said the budgeted target of 4.3 per cent of GDP is still intact, and the government is actively tapping its non-tax revenue areas like disinvestment and asset monetisation in the current fiscal.
"DIPAM and DPE have a year-long pipeline and also a medium-term outlook of disinvestment and asset monetisation. I would hope the budgeted Rs 80,000 crore under this head exceeds BE and both the departments are working on it," a source said, adding IDBI Bank disinvestment will happen going ahead.
Once the data of the April-June quarter and the impact of El Nino on the monsoon is available, the government will reassess the macroeconomic data in July.
Sources said the FY26 March quarter growth momentum is continuing in the first quarter of FY27, and there is no adverse impact on remittances so far.
Besides, GST numbers are good, frequency data are also showing up, and private investment is picking up pace, as shown in the data released by CII, sources said.
Stressing that the reform express will continue, sources said more measures to increase FDI flows into the economy are in the offing, and there is no proposal to curb capital outflow.
Sources further said that in view of rising fertiliser prices globally, the fertiliser ministry has sought a 100 per cent increase in subsidy for the current fiscal. The budget has estimated a fertiliser subsidy of Rs 1.77 lakh crore for the current fiscal.
Besides, the government has provided support of Rs 1.23 lakh crore to oil marketing companies (OMCs) to hold pump prices steady for 78 days since the West Asia crisis.
After that, the OMCs have started increasing pump prices in a staggered manner, but are still incurring a loss of Rs 650 crore per day for selling fuel at a lower rate than the prevailing global crude price.
(With inputs from PTI)
