Budget may push back fiscal deficit MTFP target

Budget may push back fiscal deficit MTFP target

New Delhi: The fiscal deficit for FY20 and its roadmap for FY21 could be heading towards a recalibration with the February Budget slated to hint at the targeted 3 percent fiscal deficit for the next financial year be pushed to 2022-23, people associated with the developments said.

“Fiscal deficit roadmap and numbers are likely to be revised for current and next fiscal. The budget is likely to announce the recalibration of the 3% fiscal deficit target for FY21 as estimated under the Medium Term Fiscal Policy (MTFP) to be pushed to 2022-23 instead of 2020-21 and for FY20, the target of 3.3% could now be touching 3.8%. The fiscal deficit for 2020-21 could now be expected at 3.9%-4%”, sources said.

This is because there is no support from disinvestment and tax revenues, all falling behind a target and it would be optimistic to expect they would substantially improve in FY21, sources said.

Also, the government does not want to give any signal of an over-optimistic macro position and ambitious futuristic data on tax and fiscal deficit since it is facing transparency and accuracy issues of these figures. Any over-optimistic macro projection will not be backed by the current economic performances as reflected by the core sector Index of Industrial Production (IIP) (who are lagging), inflation, Reserve Bank of India (RBI) and National Statistical Office (NSO) projections apart from a host of global agencies like the International Monetary Fund (IMF), World Bank and the Asian Development Bank (ADB), sources said.

Without Bharat Petroleum Corporation (BPCL) and Air India, the disinvestment target of Rs 1,05,00 cr has come down to just Rs 18,000 crore. (IANS)

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