[New Delhi, 4th Reuters]-The Indian government is unlikely to meet its fiscal deficit target this year, despite receiving additional payments from the Reserve Bank (Central Bank). This is because tax revenues have fallen sharply due to the economic slowdown. Five government officials and policy advisors revealed.
The growth rate for the April-June period was 5%, the first low growth in six years, and the government was forced to take additional stimulus measures toward the end of the year, setting the fiscal deficit to GDP target. There is a fear that it will be necessary to correct the current 3.3% to 3.5%.
Two senior officials are tax revenues, both goods and services tax (GST) and income tax, with a reduction of up to 1 trillion rupees ($ 14 billion) and an annual target equivalent of 4%. He said the shortage is expected.
One of the policy advisors said, “It is inevitable that the budget deficit will exceed the target this year. The economic slowdown is directly hitting the revenue,” and the deficit will increase unless the government makes drastic cuts in spending. I added.
On the other hand, a senior official at the Ministry of Finance has postponed plans to sell government-owned shares of some state-owned companies, such as NTPC <NTPC.NS> for electricity and General Insurance <GENA.NS> for insurance, due to a worsening market environment He expressed his view that there was a possibility.
The two advisors also announced that they had proposed to the government to postpone the achievement of the budget deficit target, to work on the economic slowdown, and to come up with policies to support the hardest hit sectors such as automobiles and textiles.