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India will meet a "challenging" fiscal deficit target of 4.1 per cent of its gross domestic product (GDP) in the year to March 31, Finance Minister Arun Jaitley said on Saturday, when presenting the Government's full-year Budget .
He set the fiscal deficit target for the 2015-16 fiscal year at 3.9 per cent of gross domestic product and said it would reduce the target gradually to 3 per cent by 2017-18, one year later than previously expected.
Ananth Narayan, Regional Head of Global Markets, South Asia, Standard Chartered, Mumbai, said: "Markets were expecting a fiscal deficit target of 3.6 per cent to be met in 2015-16, so the 3.9 per cent number will be negative for the markets as an initial reaction on Monday.
"Also markets were not expecting the Government to extend the fiscal consolidation roadmap by one year, and we were expecting the fiscal deficit target of 3 per cent of GDP to be met in 2016-17. But we have to see how this additional money coming out of the higher fiscal deficit will be spent."
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