Department of Economic Affairs Secretary Subhash Chandra Garg has said that the Finance Ministry is hopeful of meeting fiscal deficit target of 3.3 percent of the gross domestic product (GDP) for the year 2018-19, citing lesser number of uncertainties ahead, even as it missed its target for the current financial year. Calling this year’s upward revision of fiscal deficit target to 3.5 percent from 3.2 percent a ‘one-off aberration’, he said that the Indian economy is well on its path of fiscal consolidation despite a small pause of a year.
To further improve the credibility of it, the Secretary has stated that they have now proposed an amendment in the Fiscal Responsibility and Budget Management Act to statutorily bind the government to pin down fiscal deficit to three percent by 2021. He also pointed out that various factors, including the implementation of the Goods and Services Tax (GST) regime and shortfall in the non-tax revenue, led to a wider fiscal deficit in the current year. Besides, he said that while the government received better proceeds in some areas like direct tax collections and disinvestment, overall it fell short by around Rs 50,000 crore. He added that that’s the reason they have a fiscal deficit of 3.5 percent.
Garg further said that the country's economy was virtually in the last leg of fiscal consolidation and that concerns about fiscal deficit were certainly overblown. He also said that although not every quarter has that concern, most people believe that it’s very strong fiscal consolidation, unparalleled of the government’s undertaking this kind of fiscal consolidation in the world. However, he said that there are some sections which still have some reservations.