The Finance Minister Shri Arun Jaitley has kept a target of limiting fiscal deficit to 4.1 per cent for the current fiscal and to reduce it further to 3.6 per cent and 3 per cent for 2015-16 and 2016-17 respectively. Announcing this in his maiden Budget Speech today in the Lok Sabha, the Finance Minister Shri Jaitley said that considering the two years of low GDP growth, static industrial growth, large subsidy burden and not so encouraging tax buoyancy, these targets are daunting.

The Finance Minister said that Iraq crisis is leaving an impact on oil prices. Monsoon appears unpredictable and the problem of black money must also be addressed fully. Faced with these adversities, the Government would undertake some bold steps in order to enhance economic activity and spurt growth in the economy, the Finance Minister added.

Fiscal deficit target steers budgetary strategy to reduce deficits and spur growth amid external and domestic risks. Fiscal deficit targeting is central to the Budget's macro fiscal strategy, with staged reductions in the budget shortfall planned to restore fiscal discipline after low growth, weak industrial performance, constrained tax buoyancy and large subsidies. The Budget recognises external risks from oil price volatility and an uncertain monsoon and identifies undisclosed domestic funds as a challenge. To meet the consolidation path, the Government signals corrective fiscal measures and growth oriented interventions while containing expenditure pressures through subsidy restraint and strengthened revenue measures.