New Delhi: India’s fiscal deficit could reach 5.5-5.6% of GDP in the current fiscal that ends in March, forcing the government to borrow up to Rs.40,000 crore extra from the market, a senior government official told Reuters on Thursday.
Just last month, subdued tax revenue and higher spending on subsidies forced the government to revise its fiscal deficit target to 5.3% for the current fiscal from a previous target of 5.1%.
However, a dismal response to last week’s auction of mobile phone airwaves, has cast doubts on that target.
India, which had budgeted for Rs.40,000 crore revenue from the auction of mobile phone airwaves, managed to raise about Rs.9,400 crore from an auction this month. The government plans to conduct a second auction in this fiscal for the unsold airwaves.