World Economy

India Says Will Lower Fiscal Deficit

India Says Will Lower Fiscal DeficitIndia 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.


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