Categories: Business

fiscal deficit to jump to 7.9 percent in FY21 says a report

Photo: FILE

Fiscal deficit

new Delhi. According to a research report by the State Bank of India (SBI), with the government's relief package of Rs 20 lakh crore, the country's fiscal deficit could more than double to 7.9 percent during the current financial year. The report had earlier projected a fiscal deficit of 3.5 percent against GDP in the current financial year. To give relief to various sectors of the economy, the government has announced a total fiscal relief package of Rs 20 lakh crore, which is about 10 percent of GDP.

SBI's research report ECORAP said that taking into account the cash expenditure incurred due to these measures, as well as the prohibition on past and recent excise duty growth and dearness allowance growth (about 0.8 per cent of GDP), we have reduced our fiscal deficit The target of (excluding additional budgetary resources) has been increased from 3.5 percent to 7.9 percent against the revised GDP of FY 2020-21. This has been done in view of low revenue and high expenditure due to Kovid-19 epidemic. The report said that the original fiscal deficit based on previous estimates of CSO GDP is about 7.1 percent.

The report stated that we estimate that the reduction in revenue or automatic fiscal stability will have a direct impact of 4.5 percent on the fiscal deficit and an indirect impact of 0.9 percent due to changes in GDP.

This post was published on May 14, 2020 9:21 pm

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