The fiscal balance

Govt will need to work on a consolidation plan

The Union government announced a new package last week to support economic activity. The set of measures is estimated to cost about Rs 1.2 trillion. However, the government is unlikely to increase borrowing in the current year from the amended target of Rs 12 trillion. An improvement in revenue collection would perhaps help finance the expenditure. This also suggests that the government is not willing to expand the fiscal deficit beyond a point, though the final number would be significantly higher than the budgeted 3.5 per cent of gross domestic product (GDP). Overall revenue collection during the first half of