Union Budget 2015: FM must set realistic revenue, spend targets, says Religare

Brokerage house Religare expects the government to continue on the path of fiscal consolidation in the upcoming Budget. But it has cautioned that unlike in the past, revenue and expenditure targets need to be realistically framed.

Also, a credible fiscal consolidation strategy over the medium-term is highly anticipated and required, it says. "While we expect the FY15 fiscal deficit target of 4.2 per cent to be met despite soft tax collections, we will also keenly monitor the budget for: (1) a continued focus on fiscal consolidation (3.6% in FY16), (2) shifting of expenditure from non-plan to plan, and (3) a sustained reform push," says the Religare Budget preview note to clients.

The brokerage is hopeful that the government will stay the course on reforms. "In terms of structural reforms in this budget, we expect the Govt. to (1) lay down a roadmap for GST implementation, (2) improve the tax administration, (3) simplify the land acquisition process, (4) rationalise subsidies and expenditure (5) boost financial savings, and (6) provide tax incentives to the manufacturing sector under its 'Make in India' programme," says the Religare note.