Union Budget 2018: Wider Fiscal Deficit Target of 3.2% May Be Opted

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Singaporean lender DBS said that the government of India might adopt a wider gap in its fiscal deficit for the upcoming fiscal year 2018-19 after experiencing slippage in the current year, reported PTI.

Union Budget 2018: Wider Fiscal Deficit Target of 3.2% May Be Opted

The deficit for 2017-18 will come to 3.5% as against targeted 3.2% of GDP. It will cause the government to settle at 3.2-3.3 % instead of the roadmap target of 3%.

Also Read: What is Fiscal Deficit?

It should be noted that India exhausted its target in November 2017 for the current financial year when the fiscal deficit reached 112%, four months prior to the end of the financial year.

The cause of the difficulties is said to be the shortfalls in revenue as expenditure has been as planned. A higher fiscal deficit target will lead to greater amounts of borrowings by the government. A 3.2 to 3.4% target will lead to an increase in government's debts to Rs. 4.8-5.2 lakh crore.

"Expectations are building for a populist budget, targeted at rural/ agricultural development, job creation, and effective implementation of social sector schemes," it said.

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