NE NEWS SERVICE
NEW DELHI, FEB 1
Finance Minister Nirmala Sitharaman on Monday said the government estimates a fiscal deficit of 6.8 percent of the gross domestic product (GDP) in the next financial year beginning April 1.
However, the fiscal deficit in 2020-21 is estimated to soar up to 9.5 percent due to a rise in expenditure on account of the outbreak of COVID-19 and moderation in revenue during this fiscal year.
The lockdown to check the spread of the virus adversely impacted the economic activities resulting in a contraction in the economy by an estimated 7.7 percent.
For the current fiscal year, the government had earlier pegged the fiscal deficit of 3.5 percent.
While unveiling the Budget 2021-22 in the Lok Sabha, the Finance Minister said, the government proposes to bring down the fiscal deficit below 4.5 percent of GDP by 2025-26.
The fiscal deficit is an indication of the government’s borrowing to meet the shortfall between expenditure and receipts from taxes and other sources.
The deficit had soared to a high of 4.6 percent of the GDP in 2019-20, mainly due to poor revenue realisation.
The Finance Minister said the government plans to borrow Rs 80,000 crore during the residual two months of the current fiscal year.
