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The government will not be able to achieve its target of containing fiscal deficit at 3.5 per cent of the gross domestic product (GDP), government sources told TheIndianSubcontinent.
Finance Minister Nirmala Sitharaman had pegged fiscal deficit - or the shortfall in a government's revenue in a year in comparison to its expenditure - at 3.5 per cent of GDP in the Union Budget for financial year 2020-21, which ends on March 31.
The sources said that they cannot say how big the deficit would be.However, the sources said 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.Net tax receipts in the five months through August declined about 30 per cent to Rs 2.84 lakh crore compared to the corresponding period a year ago, even though fuel taxes rose.The deficit is predicted to exceed 8 per cent of GDP in fiscal year 2020-21, say economists, 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 ratings agency Moody's, 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 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)
