A breach in fiscal deficit target may force finance minister Arun Jaitley to recalibrate his fiscal consolidation road map of achieving a fiscal deficit of 3% of GDP by 2018-19. Madan Sabnavis, chief economist at Care Ratings, said the government is preparing the market for a fiscal slippage. Aditi Nayar, principal economist at ICRA Ltd, said the government’s proposal does not rule out a fiscal slippage in the current financial year. Nayar expects a mild fiscal slippage in 2017-18. Bond yields, which have been rising for the past few sessions on worries of a fiscal slippage, may rise further owing to the supply glut.

Source: Mint December 27, 2017 16:07 UTC