Question- Recently, India’s fiscal deficit in the fiscal year 2018-19 has been expected at which of the following percentage by Fitch Group’s unit, BMI Research?
(a) 3.5 percent
(b) 3.3 percent
(c) 3.0 percent
(d) 3.5 percent
Answer: (a)
Related Facts:
- On February 6th, 2018; India’s fiscal deficit estimate was released by Fitch Group’s unit ‘BMI Research’.
- Accordingly, India’s fiscal deficit in fiscal year 2018-19 is expected to be 3.5 percent of GDP.
- It is noteworthy that Fitch had predicted fiscal deficit, 3.3 percent of GDP, in the past.
- Cause of recent revision in estimates is that the policy makers have to reduce the speed of fiscal consolidation to promote economic growth.
- It is important that the government wants to achieve 7.5 percent growth targets.
- The government presented the budget for the fiscal year 2018-19 (April-March) on February 1st, 2018.
- In which the government aimed to transform the economy of the country into 5 trillion dollar economy by 2025.
- To achieve this, the expected development and employment generation is possible only at the slow pace of fiscal consolidation.
- It is important that the government had fixed the fiscal deficit target of 3.3 percent of GDP in 2018-19 as compared to the revised estimate of 3.5 percent of 2017-18.
- Although it is slow pace compared to the recommendation under FRBM (Fiscal Responsibility and Budget Management) Framework.
- Overall expenditure of ‘Budget 2018-19’ has seen an increase in comparison to earlier.
- Whose largest allocation is in transportation, rural development, agriculture, education and healthcare?
- It is important to note that big allocation in these areas was done only in the wake of long term growth.
Reference:
https://economictimes.indiatimes.com/news/economy/finance/india-fy2019-fiscal-deficit-to-come-in-at-3-5-of-gdp-report/articleshow/62804874.cms
http://www.thehindubusinessline.com/economy/high-govt-debt-burden-constrains-indias-rating-fitch/article22629767.ece