India’s fiscal deficit for the year ending in March is likely to exceed 7% of GDP. As revenue collections has been suffering from lockdown and many other restrictions due to the Pandemic.
In the month of February, 2020 government had projected a deficit of 3.5% for the current year. It has been estimated that the government borrowing of ₹7.8 trillion has to be revised to ₹12 trillion due to the relief provided to millions of people and the business losses in the pandemic.
The Covid-19 pandemic and the early lockdown imposed in India has hit hard financially.
India has estimated that GDP will fall by 7.7% this year. Another senior government source said finances were in poor conditions because of yeh shortfall in tax receipts, but the government has to cut down its cost to some extent.
Another government official reported that 2021 could also be not very good year financially for the government. The fiscal deficit estimates will be announced by finance minister Nirmala sitharaman on feb 1 when the annual budget is provided.