Fiscal Deficit Target for FY16 Achieved: Govt
New Delhi: A day after the financial year ended, the government said it had achieved the fiscal deficit target for the year, putting an end to speculation after February numbers came in on the higher side, reinforcing the commitment to fiscal discipline ahead of the Reserve Bank of India (RBI) monetary policy review scheduled for April 5.
“As per initial estimates, the fiscal deficit for 2015-16 is expected to be within 3.9%,” the finance ministry said in a statement, adding that the government remains committed to fiscal consolidation. Data released on Thursday showed that at the end of February, the fiscal deficit stood at 107% of the revised budget estimates for the full year, raising concerns that target may be breached. Lower nominal GDP growth had made the fiscal deficit target difficult, but the government decided to stay the course, compressing the deficit from the budget to the required level to stay within the 3.9% of GDP provided in the budget. The budget for the year FY16 had pegged the fiscal deficit at .₹ 5.56 lakh crore, or 3.9% of GDP, assuming 11% growth in nominal GDP for the year. With actual GDP growth now forecast at 8.6%, the absolute fiscal deficit was revised down to .₹ 5.35 lakh crore in the budget for FY17 presented on February 29.
“The disinvestment target of .₹ 25,000 crore vide 2015-16 RE has also been achieved,” the statement said. The government said the fiscal target had been met without cutting development spending.
“Plan expenditure for 2015-16 is expected to be around .₹ 4,70,000 crore. This is higher than the Plan BE of 2015-16 and also higher the actual plan expenditure in 2014-15,” the statement said.