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February 2018
 |
fiscal developments (The Total Investment & Insurance Solutions)
In
a significant admission of fiscal slippage with implications for pushing
inflation, the government on Thursday revised upwards its fiscal deficit target
for 2017-18 to 3.5 per cent of the GDP, or the equivalent of Rs 5.9 lakh crore.
The
announcement of a higher target, in place of the 3.2 per cent for the current
fiscal announced earlier, was made by Finance Minister Arun Jaitley while
presenting the Budget 2018-19 in the Lok Sabha. This is the last full budget of
the NDA government before the general elections expected to be held in the
first half of 2019.The Total Investment
& Insurance Solutions
"The
revised estimate of fiscal deficit for 2017-18 is at Rs 5.9 lakh crore, or at
3.5 per cent (of GDP)," Jaitley said, explaining that a main cause of the
fiscal slippage was that indirect tax revenues after the introduction of the
Goods and Services Tax were only available for 11 months of the current
fiscal.
"There
has been a shortfall also in non tax revenue, part of which has been made up by
higher direct tax collections and higher disinvestment income this year,"
he said. The Total Investment & Insurance
Solutions
The
Finance Minister placed the revised extimate of government expenditure for the
fiscal at Rs 21.57 lakh crore against the earlier budget estimate of Rs 21.47
lakh crore. The Total Investment & Insurance
Solutions
The
Finance Ministry's Economic Survey 2017-18 authored by Chief Economic Advisor
(CEA) Arvind Subramanian released on Monday had said that ambitious targets of
fiscal consolidation for the coming pre-election year be avoided, hinting
thereby that the target of 3.2 per cent of the GDP could be exceeded.
"Reflecting
largely fiscal developments at the Centre, a pause in general government fiscal
consolidation relative to 2016-17 cannot be ruled out," said the
Survey. The Total Investment & Insurance
Solutions
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