IMF may revise India's fiscal deficit upwards by 0.3% of GDP in WEO report

The Union government has maintained that the bank recapitalisation will be cash-neutral on its finances

The International Monetary Fund’s (IMF’s) upcoming World Economic Outlook (WEO) report may paint a less rosy picture of the government’s fiscal consolidation plan, with the ambitious public sector banks’ (PSBs’) recapitalisation exercise. 

The Fund has written to the finance ministry that it might revise the fiscal deficit estimate upward by 0.3 percentage points of gross domestic product (GDP) in 2017-18, in the WEO report. The latter is due for issue next month.

“The India team is in touch with the authorities to gather all details of the recapitalisation bonds and still considering how to account for the operation in line