INSUBCONTINENT EXCLUSIVE:
has projected Centre's fiscal deficit to be about 3.7 per cent of the gross domestic product (GDP) in 2019-20, which will be slightly
wider than the 3.4 per cent posted in fiscal 2019.The government has kept a fiscal deficit target of 3.3 per cent of the GDP for 2019-20.The
agency, in a report, said the persistent spending pressures and slower economic growth will result in continued widening of the fiscal
deficit."At fiscal year-end March 2020 (fiscal 2020), we project government deficit will be about 3.7 per cent of gross domestic product
(GDP) for the Central government and around 3 per cent for states, adding up to a general government deficit of about 6.7 per cent," the
report said.In the report, the agency cited that large fiscal deficits of some state governments will also constrain Centre's medium-term
consolidation goals.According to the agency, Indian states, which do not generate sufficient revenue sources for their spending needs,
remain dependent on Central government's grants
These states have recorded larger deficits in recent years."The introduction of the GST replaced many indirect taxes previously levied by
the states, reducing the share of own source revenue in their total revenue
As a result, states now rely on the Central government or the GST Council for a majority of their revenue, with variations across states,"
the report said."Moreover, GST revenue has been below expectations since its launch, though the Central government has agreed to compensate
states for any revenue shortfalls due to the GST for five years."States' gross borrowing needs are budgeted at Rs 7.5 trillion ($104 billion
or 3.4 per cent of the national GDP) for fiscal 2020, a 28 per cent increase over fiscal 2019
Catch all the Live TV action on TheIndianSubcontinent 24x7 and TheIndianSubcontinent India
Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.
