India Says Will Lower Fiscal Deficit

Indian government is “committed” to bringing down fiscal deficit in the medium term, a finance ministry official told Reuters on Wednesday. The government in its budget last month announced a fiscal deficit target of 3.3% of the gross domestic product for 2018/19 fiscal year starting April, higher than its previous target of 3%. Besides, the government also expects Asia’s third largest economy to grow at 8% in the next couple of years, the official said. Deteriorating state government finances pose a risk to India, which already boasts the second-largest budget deficit among major economies, Oxford Economics said in a note. India has signaled a larger fiscal deficit for the federal government for the year to March 2018 and while it has forecast a lower gap for next year, with a national election due in early 2019 many expect that target to be breached. Compounding those concerns are higher state government deficits, lower-than-expected revenues from the newly introduced goods and services tax, and farm loan waivers.