India: Delhi sure of meeting fiscal deficit target

  • The government is confident of meeting its fiscal deficit target, after the recent measures taken by it including the imposition of a windfall tax on the export of fuels and increase in the import duty on gold.
  • It expects the revenue gain from these measures to offset, to a large extent, the additional expenditure on account of subsidies and the revenue loss from excise duty cuts.
  • “We will stick to our borrowing target. Recent revenue changes, change on GST rates and health tax collection will cover largely for the extra subsidy bills,” an official told ET.
  • Another official said the government was committed to the fiscal deficit target of 6.4% of gross domestic product for the current financial year. There were apprehensions that the Centre may breach its fiscal deficit target due to excess subsidy payments.
  • The government has budgeted INR2.07tr for food subsidies in FY23, lower than the revised INR2.86tr for FY22. But the extension of the Pradhan Mantri Garib Kalyan Anna Yojana for six months to Sep 22 is expected to swell the subsidy bill to about INR2.87tr.

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