SINGAPORE (Standard&Poor's) March 1, 2007--Standard&Poor's Ratings Services today said that the budget announced by the Indian government (foreign currency BBB-/Stable/A-3; local currency BBB-/Stable/A-3) reflects ongoing efforts toward fiscal consolidation. The fiscal 2007-2008 (ending March 31, 2008) budget targets a central government deficit of 3.4% of GDP, after registering 3.7% in fiscal 2006-2007. The expected reduction in the deficit keeps the government on a path to achieve the objectives set out under the Fiscal Responsibility and Budget Management Act 2003 (FRBM), among which is to reduce the budget deficit to 3.0% by 2009. Continuing adherence to the fiscal targets set out in the FRBM remains a cornerstone in maintaining the sovereign's creditworthiness. A key challenge facing the
