Expect a moderate Budget: NCAER

The thinktank said expectations from the Budget should be moderated, as room for manoeuvre is low.

Expectations from the Union Budget on Monday should be moderated, as room for manoeuvre is low for Finance Minister P Chidambaram owing to a combination of political and economic reasons, economic thinktank NCAER on Sunday said.

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Chidambaram's biggest challenge will be to manage the rising revenue deficit, reduction of subsidy, better management of public finances and meeting FRBM targets even though fiscal deficit situation looks better now, it said.

Due to higher non-debt capital receipts and lower loan transfer to states, fiscal deficit situation is better but Chidambaram's most important problem is revenue deficit, which is out of control, NCAER said in its latest monthly report Macrotrack.

Tax revenue is expected to fall short by Rs 9,600 crore and non tax revenue by around Rs 7,400 crore, it said and added that the Government may not be able to meet the Fiscal and Budget Management Act targets due to low buoyancy in various central taxes like excise duty.