This Article is From Mar 01, 2013

Government likely to miss revenue growth target: Crisil

Government likely to miss revenue growth target: Crisil
New Delhi:

Ratings agency Crisil today said that the government is not likely to meet the revenue growth target for the next fiscal year as its estimates from spectrum and divestment sale inflows are too ambitious.

"We believe that the government is likely to miss the revenue growth target of 23.4 per cent in 2013-14 as investment and spectrum sale targets are too ambitious," it said in a report.

The agency said the Rs 58,000 crore expected from disinvestment and Rs 40,000 crore from spectrum are difficult to achieve.

Crisil, however, noted that while the fiscal consolidation could hurt growth in the short-run, it would create an environment in which the Reserve Bank of India (RBI) can cut interest rates and provide support for growth.

Referring to GDP figures in the next financial year, the report said, it retains its earlier forecast of 6.4 per cent.

"As budgetary proposals are broadly in line with our expectations, we retain our pre-budget forecast of 6.4 per cent GDP for 2013-14, which is the midpoint of the GDP growth range (6.1 to 6.7 per cent) that the budget has assumed," the rating agency said.

"However, we expect a lowering of the repo rate by 50-75 bps during the rest of 2013-14, due to lower inflation.

The report also said the rupee is likely to settle around 51-52 per dollar by the end of March 2014.