The finance ministry is betting on substantial savings in some of the flagship social schemes and lower commodity prices to stay within the year’s fiscal deficit target even as the central bank and economists raise the red flag over the Centre’s finances.
India’s fiscal deficit, or the difference between expenditure and receipts that has to be met through borrowings, during the first four months jumped to 55% of the budgeted amount against 39.5% in the year-ago period.
Finance Minister Pranab Mukherjee has targeted the current financial year’s fiscal deficit at 4.6% of GDP, which has been panned as unrealistically low by experts.