New Delhi: The government aims at a 6.3% fiscal deficit to 6.5% of gross domestic product (GDP) for the next financial year, a less ambitious target than previously planned as Covid-19 infection threatens economic recovery, three government officials are said .
Minister of Finance Nirmala Sitharaman will reveal the budget of 2022-2023 on February 1 and officials said the thought was that sharp cuts in government spending could harm growth prospects.
Indian cases The burden of Koronavirus infection soared, driven by the Omicron variant and its concern is that consumer spending and business will be beaten, leaving the government with a little choice other than to enter.
The plan is now targeting the base point of 30-50.
The fiscal deficit piece for the next financial year, officials involved in the discussion said.
They refused to be named because they were not authorized to talk to the media.
Policy makers hope to reduce the fiscal deficit by a wider margin, after cutting a deficit of 240 basis points to 6.8% in the fiscal year ending in March.
Some economists and private brokers say the fiscal deficit can be brought to around 5% of GDP from 9.4% in 2020-21, after the winding stimulus and income surge in revenue.
Rising Coronavirus Cases have forced many countries to impose restrictions, raising concern among policy makers that the decline in consumer sentiment can affect the rate of economic recovery and all budget calculations.
The third largest economy in Asia can lose a 10% growth target for the current 2021-22 fiscal year as a new Omicron variant is seen disrupting economic activities until January-March and can also reduce sentiment in the next financial year, officials said.
And, the economic growth target will not be more than 7% for the next financial year starting April, the two officials said.
The Minister of Finance will reveal new targets for government spending, tax revenues and economic growth when presenting the third annual budget in parliament.
“Budget (budget),” said one of the officials, adding the government aims to reduce the deficit and increase capital expenditure while maintaining revenue expenses remained flat.
Ministry of Finance spokesman refused to comment on the story.
The Indian economy has recovered since the car sidewalk was raised in June, but economists were afraid that new restrictions could drag growth in the coming months.
The economy was contracted 7.3% in the last fiscal year.
Any signs of higher economic slowdown and target of fiscal deficits, economists, can delay the normalization of the accommodating attitude of the Monetary Policy Committee of the Reserve Bank of India, which will meet from 7-9 February after the presentation of the budget.
“We are likely to lose the divestment target (privatization) with a wide margin,” said one official, adding that company sales such as BPCL, banks and insurance companies will be postponed to the next financial year.
The government has so far raised Rs 9,330 Crores ($ 1.3 billion), a small portion of the Crore RS 1.75 lakh target in the acceptance of privatization in the current fiscal year, while higher tax collections have helped narrow the fiscal deficit.