Budget 2016: Down to the wire, Finance Minister Arun Jaitley to meet economists

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In an unconventional move, Finance Minister Arun Jaitley will meet economists and market experts on Saturday, barely 48 hours ahead of his Budget speech on Monday. Minister of State Jayant Sinha and other key Finance Ministry officials will be part of the meeting, sources said.
While the agenda is under wraps, it is learnt that the Finance Ministry sent out invitations over email on Tuesday for the 90-minute meeting that is scheduled to start at 11 am. “The meeting is aimed at sensitising economists about the backdrop in which the expenditure budget has been prepared and to make them appreciate the difficult situation,” an official source said.
The meeting comes in the backdrop of the ongoing debate regarding deviation from the fiscal consolidation roadmap to enhance public investment in the next financial year and global brokerages coming out with a neutral to weak commentary on the fiscal situation in the run-up to the budget.
A market expert said that the meeting could be linked to a possible rise in the fiscal deficit numbers as foreign institutional investors have turned nervous over the last few trading sessions. A look at the institutional investment data shows that the FIIs have sold a net of almost Rs 4,000 crore over the last three trading days. “The meeting is unlikely to be related to any back on budget preparation, as a modification is not possible now,” said another source. He further added that the FIIs have increased their selling as they want to stay out of the Indian debt markets till there is a clarity on fiscal deficit numbers and consolidation.
“There is a sense among FIIs that they can always enter the market every quarter and the RBI has raised the limit of their GSec holding,” said the CIO-debt of a leading mutual fund on condition of anonymity.
While there are concerns on fiscal deficit numbers, the government had already redrawn the fiscal consolidation roadmap last year and stretched the time to reach the fiscal deficit figure of 3 per cent of GDP from two years to three years. It had set the fiscal deficit target at 3.9 per cent for 2015-16, 3.5 per cent for 2016-17 and 3.0 per cent for 2017-18.
The finance minister had met economists as part of the pre-Budget consultations last month and some of them had suggested that the government consider deviating from the fiscal consolidation roadmap retaining the focus on public expenditure.Budget 2016