India Set To Miss 2018-19 Fiscal Deficit Target: India Ratings

India is set to miss its fiscal deficit target for the year ending March 2019 due to a shortfall in revenues and lower-than-targeted disinvestment proceeds, India Ratings and Research said on Monday.

The country’s 2019 fiscal deficit target has been pegged at 3.3 percent of its gross domestic product (GDP) or 6.24 trillion rupees ($88.45 billion). But the credit rating agency estimated fiscal deficit at 6.67 trillion – or 3.5 percent of GDP.

“The pressure on government finances is mainly arising from the revenue side, particularly from indirect taxes and non-tax revenue,” India Rating analysts said in a note.

Prime Minister Narendra Modi is seeking a second term next year but his plans to keep the fiscal deficit at 3.3 percent of GDP have come under pressure due to muted response from a new goods and services tax (GST) in addition to welfare benefits schemes, particularly for farmers, ahead of the 2019 general elections.

However, in a separate interview to the Economic Times published on Monday, India’s economics affairs secretary in the finance ministry, Subhash Chandra Garg, said the government would stick to its fiscal deficit target for the year. – Reuters