Concern over fiscal deficit budget projections: Government will be forced to cut spending

New Delhi, December 19, 2019, Thursday

From April to November of the current financial year, the country's fiscal deficit is expected to reach 5 percent of the target. The fiscal deficit is projected to be Rs 1.8 trillion at the end of the financial year. From April to November, the fiscal deficit stood at 8.2 percent of the full year target.

The fiscal deficit figures from April to November of the current fiscal year are set to be released on December 3. At the end of November, the fiscal deficit is expected to reach Rs 1.8 trillion more than the target, finance ministry sources said.

This means that if the current fiscal year's fiscal deficit is to be limited to 5.5 percent of GDP, the central government will have to cut its spending expenditures in the remaining four months of the fiscal year. In the first six months of the current fiscal, the fiscal deficit stood at 8.5 percent of GDP.

Given the current circumstances, the central government is likely to miss its fiscal deficit target in the current fiscal year. The deficit may rise from 8.5 percent to 8.5 percent of GDP. Advanced tax figures have been revealed and are not particularly encouraging.

Even if the target of disinvestment is achieved and the non-tax revenue is higher than estimated, income through taxation is a major concern, sources said. The revenue through Vera is likely to fall by two trillion rupees.

The collection of the Center through GST in the current financial year, April-November, is 5% lower than the budget estimates. The revenue from the center's GST during the period was estimated to be Rs 1.8 trillion against the estimated estimate of Rs 1.8 trillion.

Due to the ongoing economic downturn in the country, revenue through GST is declining. On the other hand, the relief provided by the government to the industry to tackle the recession is also hitting the revenue front.