India Economics - Revisiting Fiscal Deficit Forecast For FY22: CARE Ratings
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CARE Ratings Research Report
The central government finances have been fairly stable so far despite the pandemic led disruptions during the first quarter of FY22.
Data for the first five months (April – August) suggest that tax revenue collections have been robust. Non-tax revenue also got a boost with higher than budgeted surplus transfer by the Reserve Bank of India.
However, some upside risks to the fiscal deficit still exist on account of recently announced telecom sector package, relief measures announced in June 2021 and underachievement of disinvestment targets.
The Central government has budgeted a fiscal deficit of 6.8% for FY22.
This target is unlikely to be met given the additional expenditure requirements under the relief measures announced by the government.
This report underlines the impact of these announcements on the fiscal deficit
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