In his blog, S C Garg, former Economic Affairs secretary, has claimed that the actual fiscal deficit for the last financial year and the current one is more than a full percentage point higher than the official data.
On the face of it, India’s fiscal deficit, which essentially maps how much money the Indian government has to borrow to make up the gap between its expenditure and its revenues, was just 3.4 per cent of the gross domestic product (GDP) for 2018-19. For the current year, the Union Budget presented in July expected the fiscal deficit to be 3.3 per cent of the GDP.
However, for long, it has been suspected that the official figures hide the true fiscal deficit.
That’s because some of the government’s expenditure was funded by the so-called “off-budget” items. As a result, while this extra expenditure did not figure in the official calculations, it did mean that the true fiscal deficit or borrowing by the public sector was higher than the level presented in the Budget.
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