Budget 2018: Fiscal deficit number to be close to target of 3.2% of GDP

When Finance Minister Arun Jaitley presents the 2018-19 Union Budget on February 1, he may announce a fiscal deficit number for 2017-18 quite close to the target of 3.2 per cent of gross domestic product (GDP) in spite of additional borrowing, higher-than-anticipated spending on flagship schemes, and projected shortfall in the goods and services tax (GST) and spectrum sales.

Accounting for the first Advance Estimates for 2017-18, an additional planned borrowing of Rs 200 billion, the fiscal deficit could come in at 3.35 per cent of GDP. But even that can be negated and the fiscal deficit be brought down to meet the Budget Estimates, if Rs 200 billion is not withdrawn from the National Small Savings Scheme, analysts say. 

To ensure there is no substantial deviation from the fiscal target, the finance ministry is working on three fronts: Asking back unspent allocations from other departments or cutting the gross budgetary support (GBS); carrying forward certain spending items, including subsidy payments; and equally distributing integrated GST proceedings between the Centre and states.

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