Economic slowdown: States seek relaxation in fiscal deficit target to 4%

They also suggested measures to strengthen cooperation between states and Centre to attain $5 trillion economy

With tax revenue slowing in a sputtering economy, some states on Wednesday suggested Finance Minister Nirmala Sitharaman to go for fiscal expansion and relax the deficit target to 4 per cent of the GDP.

The finance minister in her July Budget reduced the fiscal deficit target for 2019-20 to 3.3 per cent from 3.4 per cent earlier.

Keeping in mind its fiscal deficit target, the government has stayed with the borrowing plan for the fiscal as announced in the
Budget despite a sharp cut in corporate tax rate that is expected to cost Rs 1.45 trillion.

During the pre-Budget consultation with