Mumbai (Maharashtra) [India], Oct 1 (ANI): The consolidated fiscal deficit of the Centre and state governments may touch 13 per cent of GDP in the current financial year, State Bank of India’s research report Ecowrap said on Thursday.
Fiscal deficit — the gap between expenditure and revenue — during April to August was at 109.3 per cent of the annual target estimated in Union Budget. In absolute terms, the fiscal deficit was at Rs 8.7 lakh crore.
“Given these numbers, sticking to the budgeted borrowing numbers of Rs 12 lakh crore indicates large expenditure cuts that will be clearly inimical to growth,” said the report.
As per current trends, the government sticking to borrowing programme though will please the debt markets but looks challenging given the current exceptionally weak government finances.
“Net revenue slippage of the Centre, after taking into account increase in excise duty gains along with the shortfall in tax and non-tax revenue and disinvestment receipts, is likely to come around Rs 7 lakh crore in current fiscal,” said the report.
“We are thus expecting that consolidated fiscal deficit of the Centre and states will touch 13 per cent of GDP as per current trends.”
The report said that bad thing is that incremental bank credit that increased in June and July by Rs 39,200 crore declined in August by Rs 36,000 crore which is mainly due to decline in credit to personal loans and infrastructure segments.
Credit to non-banking finance companies, however, jumped in August after three successive months of decline. (ANI)
