CEA Krishnamurthy Subramanian sees FY21 fiscal deficit at over 5%

No doubt that economy will contract in Q1, Krishnamurthy Subramanian says

The Centre’s fiscal deficit in 2020-21, as things stand now, could be 1.7-1.8 percentage points higher than the 3.5 per cent of gross domestic product, which was targeted in the Budget, Chief Economic Advisor Krishnamurthy Subramanian has told Business Standard. 

He also said there would a contraction in GDP in the April-June quarter. Such an increase would take the 

fiscal deficit for the year to 5.2-5.3 per cent of GDP if the underlying assumption of 10 per cent nominal GDP growth stays constant.

“Given the 50 per cent or thereabouts increase in borrowing that has been announced, it is a reasonable estimate to