More worry for Modi govt as fiscal deficit jumps to 3.5%

India's fiscal deficit for FY18 has jumped to 3.5 per cent of GDP, official data showed today. The fiscal gap stood at Rs 5.91 lakh cr for fiscal year 2017-18. This means the fiscal deficit has now reached 99.5 per cent of the revised norms of Rs 5.94 lakh crore for FY18.The FY18 revenue gap stood at 2.7 per cent of GDP against a revised aim of 2.6 per cent, as per official data.The government outlined a fiscal deficit target of 3.3 per cent of GDP in 2018-19 as against a revised estimate of 3.5 per cent in 2017-18. However, the target is under considerable pressure from giveaways to farmers and other welfare benefits ahead of a national election in 2019. Modi government's effort to shore up its coffers through disinvestment of state carrier Air India has also flopped as no bidder has come forward for the debt-laden airline.Meanwhile, Economic Affairs Secretary Subhash Chandra Garg exuded confidence that the fiscal deficit will be within 3.5 per cent target. He also said that oil prices won't impact growth.

from The Economic Times https://ift.tt/2xvfztr