Budget 2019: Fiscal Deficit Target Of 3.3% Realistic, Says Finance Secretary
The fiscal deficit this year is 3.3 percent brought down from 3.4 percent, says FM Nirmala Sitharaman in her budget speech.
Dismissing apprehension over meeting fiscal deficit target of 3.3 percent of the GDP, the Finance Ministry on Friday said the lower target is realistic as the government is expecting net additional revenue of Rs 6,000 crore over the interim budget estimates.
The government in the interim budget in February had projected a fiscal deficit of 3.4 percent for the current fiscal. Several critics, including some rating agencies, have doubted prospects of meeting this ambitious fiscal deficit target.
In a customary briefing after Nirmala Sitharaman presented the Union Budget 2019, Finance Secretary Subhash Chandra Garg said, “On the revenue side, as compared to actual of 2018-19, direct taxes are expected to increase by 17.5 percent, indirect taxes are going up by only 15 percent. These are very realistic targets in our judgement. On the non-tax side, there is also an increase as we are expecting better dividends.”
On the expenditure side, he said, it is more or less the interim budget only with an increase of Rs 2,000 crore. “All these put together gives us a saving of Rs 6,000 crore as compared to the interim budget that brings down fiscal deficit from 3.4 percent to 3.3 percent.”
“Some concern raised that outside budget there might be borrowing even there, there is the reduction. The fully-serviced bonds, it has been brought down from Rs 64,000 crore to Rs 56,000-57,000 crore...so the number is reasonable,” he said.
In the Budget 2019, Finance Minister Nirmala Sitharaman announced reduction in the fiscal deficit target. “The fiscal deficit this year is 3.3 percent brought down from 3.4 percent,” she said in her budget speech in the Lok Sabha.
Fiscal deficit is the difference between expenditure and revenue.
Earlier in the day, Moody’s said there are risks of India missing 3.3 percent fiscal deficit target for the current financial year if tax revenue falls short of projection.
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