Fiscal deficit set to widen: India Ratings

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New Delhi, December 26

The current fiscal could see a slippage in the fiscal deficit target due to higher expenditure on employment guarantee schemes and subsidies, said ICRA, an Indian subsidiary of international ratings agency Fitch.

“Higher-than-budgeted revenue expenditure triggered through the first and likely second supplementary demand for grants in combination with lower-than-budgeted nominal GDP will push the fiscal deficit,” it said.

In the first supplementary demand, the Centre increased the spend on nutrient-based fertiliser subsidy by over Rs 13,000 crore and Rs 19,000 crore for MGNREGA. The disinvestment target will also take a hit. The government is likely to make a second supplementary demand for grants, leading to a rise in revenue expenditure by Rs 2 lakh crore.