Centre Won’t Be Able To Meet Fiscal Deficit Target As Budgeted: Sources
The government will not be able to achieve the target of containing fiscal deficit at 3.5 per cent of the Gross Domestic Product (GDP) which was pegged by Finance Minister Nirmala Sitharaman when she presented the Budget for the current financial year, government source told NDTV. The sources said that they cannot say how big the deficit would be.
However, the sources added that the government is working on another economic stimulus package with an “open mind”.
The central government’s fiscal deficit for the five months through August stood at Rs 8.7 lakh crore, or 109.3 per cent of the budgeted target for the current fiscal year ending in March 2021.
Net tax receipts in the five months through August declined by about 30 per cent year on year to Rs 2.84 lakh crore, even though fuel taxes rose.
The deficit is predicted to exceed 8 per cent of GDP in the 2020/21 fiscal year, economists said, mainly due to a sharp economic contraction triggered by the pandemic.
“Five months of data reveal a sordid tale,” said Aditi Nayar, economist at ICRA, the Indian arm of Moody’s rating agency, adding the deficit for the whole year could spike to Rs 14 lakh crore against budgeted estimate of Rs 8 lakh crore.
The government has not officially revised the fiscal deficit target so far for the whole fiscal year.
The economy is forecast to shrink up to 10 per cent in the current fiscal year, according to estimates by several private economists, its weakest performance since 1979.
(With inputs from Reuters)