The centre has relaxed the fiscal deficit target for the current financial year 2019-20 to 3.8 percent of Gross Domestic Product (GDP) due to the economic slowdown.
Earlier, it had set a budget deficit target at 3.3 percent for FY20.
The GDP growth projection is marked slow to an 11-year low of 5 percent during the current financial year ending March. The centre registered a fall in the growth to 4.5 percent in the July-September quarter, its lowest level received in 26 quarters. The slowdown in growth has laid a negative impact on tax mop up.
The annual economic report, released on Friday, relaxed the fiscal deficit target to revive growth. The government’s fiscal deficit touched 132.4 percent of the full-year target during December end, as stated by the latest data from Controller General of Accounts.
Fiscal deficit typically increases in the first three quarters of the financial year, and then slows down during the last quarter by the way of spending cuts or so.