India FY20 fiscal deficit widens to 4.59% of GDP
Revenue deficit for FY20 was at 3.27% of GDP.
May 29, 2020 / 07:30 PM IST
India's fiscal deficit for FY20 widened to 4.59 percent of the gross domestic product (GDP) overshooting government target of 3.8 percent by nearly 80 basis points.
GDP at current prices in the year 2019-20 is estimated to attain a level of Rs 203.40 lakh crore, the data released by the Central Statistics Office on May 29 showed. The GDP growth for FY2019-20 was at 4.2 percent, against 6.1 percent in FY 2018-19.
Fiscal Deficit is the difference between the income and expenditure of the government. The total income includes taxes and non-debt capital receipts.
According to an Ecowrap report released by the SBI Research, the deficit could further widen in the current fiscal (FY21) with the full impact of the government's Rs 20 lakh crore stimulus package.
SBI expects FY21 fiscal deficit to balloon to 7.9 percent. The report had earlier estimated it at 3.5 percent.
"After taking into account cash outflow of these measures as well as the previous and the recent excise duty hike and DA freeze (amounting to around 0.8 percent of GDP), we now revise our baseline fiscal deficit (excluding extra budgetary resources (EBR)) to 7.9 percent of the revised GDP in FY21 from 3.5 percent earlier, owing to lower revenues and higher expenditure against the backdrop of COVID-19 pandemic," SBI said in its research report Ecowrap.
The government had also recently announced additional borrowing of nearly Rs 4.2 lakh crore taking the total estimated borrowing for FY21 to Rs 12 lakh crore.
India's gross domestic product (GDP) growth for the January-March quarter of FY20 slowed to 3.1 percent, as the COVID-19 induced disruptions appeared to have devastated the broader economy, pummelled by collapsing household spending and shuttered businesses that are battling to stay afloat.