Finance Minister Nirmala Sitaraman has said the government's fiscal deficit for 2020-21 (Apr-Mar) would "certainly" be higher than the estimate provided in the Budget. "This year...the fiscal deficit number is not what was said in the Budget of February 2020. It is certainly going to be away from it, it is certainly going to be higher than that," Sitharaman said while speaking at the Hindustan Times Leadership Summit.
The central government's fiscal deficit rose 32.3% year-on-year to 9.532 trillion rupees in Apr-Oct, accounting for 119.7% of the Budget estimate for the entire financial year, according to data released by the Controller General of Accounts. The Budget for 2020-21 (Apr-Mar) had pegged the fiscal deficit at 7.963 trillion rupees, or 3.5% of GDP. This is the first time the finance minister has conceded that fiscal deficit will be higher than the Budget estimate this financial year. With the coronavirus-induced lockdown taking a huge toll on the Indian economy, the government's revenues saw a massive slump in the first six months of the year, with many economists projecting the Centre's fiscal deficit this year to cross 7.0% of GDP.
Speaking on the spike in inflation, Sitharamn said she was not worried about it. "I am actually not worried about inflation to the extent that there are seasonal ups and downs in prices and the commodities about which we are seeing clear hike in their prices are largely seasonal. If you take the food grains, edible commodities such are fruits and vegetables, also look at edible oils, there are seasonal fluctuations...," the minister said.
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