New Delhi: Finance minister Arun Jaitley in his last full budget revised his fiscal deficit target for 2018-19 to 3.3% of the gross domestic product (GDP) against the earlier target of 3%, after breaching the deficit target for 2017-18.
With this, Jaitley has revised the fiscal consolidation glide path for three successive years.
While the budget estimate of fiscal deficit for 2017-18 was 3.2% of the GDP, the revised estimate is now 3.5% of the GDP, the same as 2016-17.
Jaitley said this is because the government will receive goods and services tax (GST) revenue for 11 months in 2017-18 and face shortfall in non-tax revenue due to lower accrual through spectrum auction. Part of the shortfall was met through higher direct tax collections and disinvestment, Jaitley said. The government hopes to breach the disinvestment target in 2017-18 by collecting Rs1 trillion against the budget estimate of Rs72,500 crore. For 2018-19, the government has set a disinvestment target of Rs80,000 crore, including gains from privatization of Air India Ltd.
The government has also accepted key recommendations of the N.K. Singh Committee on fiscal discipline to reduce debt-to-GDP ratio to 40% from 49.4% at present. However, Jaitley clarified that fiscal deficit will remain the key operational parameter.