India signals possible deficit revisions in upcoming budget

Updated: 11:22 GMT, Feb 26, 2016 | Published: 11:21 GMT, Feb 26, 2016 |

India should review its mid-term fiscal strategy, a government report urged on Friday (February 26), in a possible indication that Finance Minister Arun Jaitley may have to borrow more to raise pay for government employees and bail out banks.

The report called India “a haven of stability” in a gloomy international landscape but, as Group of 20 finance ministers gathered for talks in Shanghai, warned too of possible currency turmoil in Asia after China’s recent devaluation.

The Economic Survey, which sets the scene for Jaitley’s third budget on Monday (February 29), forecast the Indian economy would grow by between 7.0 percent and 7.75 percent in the 2016/17 fiscal year that starts on April 1.

Industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) asked the government to increase public investment, especially in rural areas, to create jobs.