Mumbai: Following the government's presentation of its federal budget to stimulate economic growth on Tuesday, a Moody's analyst said the ongoing interruption from the COVID-19 pandemic posed a danger to India's fiscal deficit objective for 2022/23.

Nirmala Sitharaman, India's finance minister, set a budget deficit target of 6.4 percent of GDP for the fiscal year ending March 2023. She predicted a budgetary deficit of 6.9% for the current fiscal year, slightly higher than the 6.8% projected.

The government's larger-than-expected fiscal deficit demonstrates the threat posed by the pandemic, according to Christian de Guzman, senior vice president, sovereign risk group, Moody's Investors Service, who also noted that the government had to spend more and miss out on some privatisation receipts.

The Indian economy has recovered from the pandemic's worst effects, but mobility restrictions imposed to stop the virus spreading have resulted in the loss of tens of thousands of jobs, stifled private investment, and disrupted supply chains, driving up food and raw material prices.

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