Amid uncertainty on the possible impact on the expenditure if government decides to enhance the Minimum Support Price to farmers on some crops, Secretary of the Department of Expenditure under Finance Ministry Ajay Narayan Jha has said that the fiscal deficit, which is the difference between total revenue and expenditure, for the current financial year (FY19), will be maintained at 3.3% of the gross domestic product (GDP) and the fiscal consolidation of the country is as per the ‘commitment’.
Jha said ‘India’s fiscal consolidation path is absolutely as we are committed to. We were keeping fiscal deficit number at 3.3%, there is no slippage’. The government had budgeted to cut fiscal deficit to 3.3% of GDP in current financial year, from 3.53% of GDP in previous financial year. Fiscal deficit in the first month of the current financial year had touched 24.3% the budget estimates due to higher revenue and lower expenditure. During the month, the government had received Rs 71,450 crore (3.93% of corresponding budget estimates (BE) for FY19 for total receipts).
Besides, India’s fiscal deficit in the year ended March 2018 came in at 3.53% of GDP, in line with the revised estimates. India revised its fiscal deficit target in February to 3.5% of GDP from 3.2% of GDP for the financial year 2018. The shortfall for the last fiscal year was Rs 5.9 lakh crore ($87.53 billion). India got Rs 12.4 lakh crore in net tax receipts during the fiscal year.