Fiscal deficit 3.2% based on revised GDP numbers: Economic Affairs Secretary

Ruling out fiscal deficit as a real concern, Economic Affairs Secretary Subhash Chandra Garg on Saturday said the government has managed to stick to the fiscal consolidation path and if one considers the revised GDP numbers released earlier this week, it has done even better than the targets.

He said if one ignores the Rs 20,000 crore provision allocated for direct income scheme for farmers in the current fiscal, the government was bang on target or might have even done better than the 3.3 per cent fiscal deficit target set in the Budget Estimates.

"Also, the revised numbers for GDP have come now and according to that, the fiscal deficit would be only 3.2 per cent. So we are, in fact, doing better," he told Times Now TV channel.

The government on Thursday revised the Gross Domestic Product (GDP) growth rates by 110 basis points from 7.1 per cent to 8.2 per cent for 2016-17 and by 50 basis points from 6.7 per cent to 7.2 per cent for fiscal 2017-18.

After revision, the real GDP or GDP at constant (2011-12) prices for 2017-18 and 2016-17 stood at Rs 131.80 lakh crore and Rs 122.98 lakh crore respectively.

Garg said the government's own commitment to bring fiscal deficit to three per cent by 2021 was on track.

"We are on that glide-path, which is not a straight line. It glides through that and we are going according to that," he said.

"For the current year, we said 3.3 per cent, we have revised it to 3.4 per cent. This is after accomodating the Rs 20,000 crore provision, which is 0.1 per cent. Somebody may simply say that other than that you are bang on target or better. So there's not much of a change from that perspective," the Secretary said, adding that in real numbers, the gap between 3.3 per cent and 3.4 per cent was even smaller, and between about Rs 3,000 and Rs 4,000 crore.

"Many people have been saying they probably feared worse. They were thinking that possibly this will be 3.5 or 3.7 per cent. So the government managed to stick to the fiscal deficit as it is.

"That is what is also reflected in our borrowing. We have not revised our borrowing targets much. Next year's borrowing is also almost flat at the current year. So I think there is no real concern to be feeling bad about," he added.

The Interim Budget announced by Finance Minister Piyush Goyal on Friday reflected a slippage in deficit targets for 2018-19 and 2019-20 by 10 and 30 basis points respectively to 3.4 per cent of the GDP for each fiscal.

--IANS

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