India's FY22 fiscal deficit may be better at 6.6% on stronger-than-expected tax buoyancy: Fitch

Other News Materials 23 November 2021 11:22 (UTC +04:00)

The Centre might better its fiscal deficit at 6.6 per cent of GDP on this monetary 12 months on stronger-than-expected revenue buoyancy, even when the budgeted disinvestment goal just isn’t met, Fitch Ratings has mentioned.

The worldwide score company had final week stored the sovereign score unchanged at ‘BBB-‘ with a detrimental outlook, and mentioned that the dangers to India’s medium-term development outlook are narrowing with speedy financial restoration from the pandemic and easing monetary sector pressures.

In an electronic mail interview with PTI, Fitch Ratings Director (Asia-Pacific Sovereigns) Jeremy Zook mentioned the 2 key constructive triggers that might result in a revision of the outlook to steady are implementation of a reputable medium-term fiscal technique to decrease debt burden and better medium-term funding and development charges with out the creation of macroeconomic imbalances, akin to from profitable structural reform implementation and a more healthy monetary sector.

“We forecast that the central government will achieve a deficit of 6.6 per cent of GDP in the current fiscal year, largely as a result of stronger-than-expected revenue buoyancy. Our forecasts assume that the government does fall short of its budget target for divestment,” Zook mentioned.

In the 2021-22 (April-March) Budget introduced on February 1, the federal government had pegged the fiscal deficit, or hole between the Centre’s expenditure and income, at 6.8 per cent of GDP or Rs 15.06 lakh crore.