Govt may contain fiscal deficit at 3% in FY20 after RBI's surplus transfer

The fiscal deficit target seemed challenging with subdued tax collections

The government may be able to contain its fiscal deficit at 3 per cent of gross domestic product (GDP) in 2019-20 (FY20) following the Reserve Bank of India (RBI)’s surplus transfer, a top government official said on Monday.

“The government will be able to reduce the fiscal deficit by 0.3 percentage point this fiscal year thanks to the RBI’s transfer of Rs 1.76 trillion,” the official said, requesting anonymity.

Alternatively, the government may use the surplus funds to provide a stimulus package to revive economic activity — a step it resisted from taking when Finance Minister Nirmala Sitharaman announced a