Union Budget 2018: 5 numbers to watch out for


New Delhi: Finance minister Arun Jaitley will present his final full-year budget for the National Democratic Alliance (NDA) government before the general elections scheduled for early next year.

Here are five key numbers that you need to watch out for.

Fiscal deficit

While there is pressure on Jaitley to meet the fiscal deficit target of 3.2% of GDP for the current fiscal ending 31 March to maintain his record of fiscal consolidation, elections in eight states this year and general elections next year will also put pressure to defer achieving the fiscal deficit target of 3% of GDP set for next year. The fiscal deficit target for these two years and the explanation given by Jaitley will be keenly watched by analysts and markets. The finance minister is also likely to make a statement on the recommendations of the N.K. Singh committee on fiscal discipline, though he is unlikely to accept the recommendations in toto.

Nominal GDP growth

The nominal GDP growth estimate for 2018-19 will be crucial in deciding the fiscal deficit estimate for the year. A higher nominal GDP number will help the government show a lower fiscal deficit target and vice-versa. Chief economic adviser in the finance ministry Arvind Subramanian has hinted that the government may even use the Economic Survey estimate of 10.5% nominal GDP growth for 2017-18 in the budget which is higher than the estimate of 9.5% by the statistics office for the same year. This may also help the government show a marginally smaller fiscal deficit number for 2017-18.

Disinvestment target

With the government grossing over Rs90,000 crore through disinvestment in the current financial year so far, way above its disinvestment target of Rs72,500 crore for the year, it is likely to set a more ambitious target for the next financial year. With plans to privatize national carrier Air India on track, nobody will be surprised if it sets its eyes to garner Rs1 trillion through stake sale in public sector enterprises which will be a record in itself.

Hike in public investment

The government is expected to significantly increase its infrastructure spending, especially for rural India, to address rural distress and create more jobs. It budgeted to increase its capital expenditure by 10.7% in 2017-18. How it manages to raise public investment at a time private investment is yet to pick up in a fiscally tight year will be closely watched.

Growth assumption for direct tax and GST

This being the first budget where the finance minister will give revenue collection targets from the goods and services tax (GST), analysts will try to gauge how soon the government expects volatile tax collections under GST to stabilize. Post demonetisation, 1.8 million additional personal tax filers, as estimated by the Economic Survey, may give the finance minister confidence to project robust growth in direct taxes. However, irrationally high direct tax and GST collection figures will be seen with suspicion by analysts.livemint