Beyond this budget

Given the sharp expenditure compression—the budget in December actually had a fiscal surplus of R8,230 crore—it’s very likely the finance minister will be able to meet his new fiscal deficit target of 5.3% of GDP. Apart from the sharp cuts in Plan expenditure, the finance minister is likely to defer payments to oil and fertiliser firms—payments to oil PSUs are already late by two quarters and Citi estimates a R70,000 crore deferral in terms of oil/fertiliser payments, an amount that equals around 0.7% of FY13 GDP.

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