The government has revised the fiscal deficit target for 2018-19 or FY19 to 3.4 per cent of gross domestic product (GDP) from the Budget Estimate (BE) of 3.3 per cent. For 2019-20 or FY20, Finance Minister (FM) Piyush Goyal has retained the fiscal deficit at 3.4 per cent of GDP, thus delaying the fiscal consolidation path to 3 per cent of GDP.
FY19 is the second consecutive year that the government has missed its fiscal deficit target. Goyal attributed the slippage to the income-support package for the farm sector announced in the interim Budget for FY20 on Friday.
“We would have maintained the fiscal deficit… and taken steps to consolidate (it). However, considering the need for income support to farmers we have provided Rs 20,000 crore in FY19 (RE) and Rs 75,000 crore in FY20 (BE),” he said.
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