Budget 2018: Govt may relax fiscal deficit target, says Icra's MD Takkar

BUDGET 2018 - The narrower-than-expected win in Gujarat and upcoming polls in other states will lead to a reorientation of priorities for the government with a greater focus expected on the farm and small businesses sectors, the head of a domestic rating agency has said.

However, the increased spends which it may entail will have repercussions on fiscal deficit and the government may go for relaxed targets in the upcoming budget, Icra's managing director and chief executive Naresh Takkar told PTI recently.

"Gujarat was surprisingly difficult. The kind of hold which the PM and the BJP have over Gujarat, they may like to interpret the results more deeply," he said.

"They still have 18 months, so the government should be in a position to re-orient its priorities. It is committed on reviving the economy and reforms, but the political outlook, (of) which they will have a better understanding now, they would re-balance their priorities," he added.

It will focus more on the rural sector and small businesses, Takkar said, adding that the Gujarat verdict and upcoming polls will have a "significant" impact on the economic policymaking in the near future.

The government will realign its priorities and with a desire to see early results, start spending as well, he said.