The fiscal challenge: Non-tax revenues can spoil the party

A look at the composition of what drives the deficit numbers explains why meeting the fiscal deficit target for the current year will be a difficult task

Numbers for the first half of the current financial year suggest that there might have been some improvement in the government’s fiscal performance. But is that enough of an indication that the government would meet the full year’s fiscal deficit target? A K Bhattacharya analyses for Business Standard.

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The Union government’s fiscal performance in the first half of 2017-18 shows signs of a turnaround. But that does not guarantee that the government will be able to meet the current year’s fiscal deficit target of 3.2 per cent of gross domestic product.

Why does one see a turnaround? After steadily rising in