‘Govt will maintain fiscal deficit target’

Move to raise Rs 50k cr from G-Secs has raised concerns

A member of the Prime Minister's Economic Advisory Council, Rathin Roy, on Thursday said the central government will do its best to maintain the fiscal deficit target of 3.2 per cent of the Gross Domestic Product (GDP) for the current fiscal.

"I am sure the government will do its best to maintain the 3.2 per cent fiscal deficit target," he said on the sidelines of the Finance and Economics Conference, organised by the International Management Institute in the eastern city. The Centre's decision to "raise additional market borrowings of Rs 50,000 crore only in fiscal 2017-18 through dated government securities" raised concerns that it may miss the fiscal deficit target. Responding to a query on the government's focus for the upcoming union budget for 2018-19, Roy said the government should focus on prudent fiscal policy, so as to deliver inclusive economic growth. Furthermore, Roy, who is also the Director of the National Institute of Public Finance and Policy, hailed the West Bengal government for increasing its tax collections, controlling expenditure and bringing efficiency in expenditure.

The government on Wednesday said it has decided to make an additional borrowing of Rs 50,000 crore this fiscal through dated securities, a move that may put a burden on the fiscal deficit target of 3.2 per cent of GDP. However, there will be no change in the net borrowing as envisaged in the Budget for 2017-18, said a Finance Ministry statement. Finance Minister Arun Jaitley, in his previous budget speech, pegged the fiscal deficit for 2017-18 at 3.2% of GDP, saying the Centre will remain committed to achieving three per cent in the following year. Jaitley also said that the government had taken note of the fiscal deficit roadmap of three per cent recommended by the FRBM.