The Centre is confident of meeting its fiscal deficit target of 5.9 per cent of the Gross Domestic Product (GDP) for financial year 2023-24 even if there is any variation in nominal GDP growth as the tax revenue trend is comfortable so far, a senior government official said Wednesday. The government is not looking at any curbs on spending, with some reallocation of savings expected to happen as it looks towards additional allocation for existing or new schemes in the supplementary demands for grants in the upcoming Parliament session, the official added.
Concerns have risen about nominal GDP growth not meeting the Budget assumption of 10.5 per cent as wholesale inflation has been negative for seven consecutive months. Some estimates have pegged the nominal GDP growth to be around 9 per cent which could result in a lower GDP deflator as it is primarily made of the Wholesale Price Index (WPI). The fiscal slippage risks arise from the fact that the government’s fiscal deficit target of 5.9 per cent is calculated as a percentage of the GDP. The latest print for WPI inflation rate unexpectedly fell to (-) 0.52 per cent in October, data released on November 14 showed.
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