JOIN US The Reserve Bank of India (RBI) on Thursday welcomed the Union Budget 2013-14 proposals presented in the parliament saying it has laid the foundation for lowering fiscal and current account deficits, apart from supporting both domestic and foreign investments.
RBI also said the government's net market borrowing target of around Rs 5 lakh crore (budget estimate for the next fiscal is Rs 4.84 lakh crore) is manageable.
"The Budget will go a long way in lowering the fiscal risks. The fiscal targets achieved in 2012-13 (5.2 percent of GDP) and that laid down for 2013-14 (projected at 4.8 percent) will lay the foundation for a sustainable rebalancing of government finances. This would impart confidence in the economy and support investments, both domestic and foreign," RBI Deputy Governor Urjit Patel said.
When asked on monetary response to the Budget proposals in general and the fiscal consolidation roadmap in particular, Patel responded that the RBI response will be known on March 19. "As you know, the mid-term monetary policy review is next month. So, we will reflect on that and discuss it next month."
The Budget estimated fiscal deficit for the current financial year at 5.2 per cent and at 4.8 per cent in FY ‘14.
Patel added apart from lowering of twin deficits , the Budget will boost household savings along with creating a space to augment private investment. "The Budget sets the stage for lowering the twin deficits, moderating the drafts of government on household financial savings and helps create the fiscal space to augment private investment," he said.