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What Will Be the Fiscal Deficit at the End of FY22?

What Will Be the Fiscal Deficit at the End of FY22?

RBI has expressed reservations over the Union government's ability to rein in the fiscal deficit at the budgeted 6.8 per cent after it moved the second supplementary demand of grants worth Rs 3.73 lakh crore.

Illustrations by Rahul Sharma Illustrations by Rahul Sharma

What will the fiscal deficit be at the end of FY22? The Reserve Bank of India, in its financial stability report, has expressed reservations over the Union government's ability to rein in the fiscal deficit at the budgeted 6.8 per cent after it moved the second supplementary demand of grants worth Rs 3.73 lakh crore. But economists expect the number to be better than the budgeted one on the back of a 65 per cent growth in net tax revenues in the April-November period. In the period, the fiscal deficit, which is the gap between the government's revenue and expenditure, touched 46.2 per cent of the budget target compared with 135.1 per cent of the target in FY21. While the disinvestment target of Rs 1.75 lakh crore is unlikely to be met, Devendra Kumar Pant, Chief Economist, India Ratings, says the higher tax and non-tax revenue collections are expected to more than offset the shortfall in disinvestment, "leading to the fiscal deficit coming in at 6.6 per cent of GDP in FY22".