India’s Fiscal Deficit May Breach 5.9% Of GDP Target: India Ratings And Research

Syllabus: GS-III

Source: Indian Express

Subject: Indian Economy.

Topic: Growth & Development

Issue: Fiscal Deficit Breaching GDP target.

Context:  India faces a potential fiscal deficit exceeding the targeted 5.9% of GDP, reaching 6%, according to India Ratings and Research.  

Fiscal Deficit Projection:

  • The main reason for exceeding the target is anticipated to overspend in revenue, surpassing the budget estimate by ₹2 lakh crore.
  • Total spending for 2023-24 now stands at ₹6 lakh crore, Encompassing revenue and capital expenditures.
  • Parliamentary approval was secured for the first supplementary demand for grants. Additional cash outgo of ₹53,378 crore.
  • First supplementary demand aimed at priority areas: food, fertilizer, LPG subsidy, MGNREGS.
  • Expectation of a second supplementary demand for grants with a potential increase in revenue expenditure to ₹1 lakh crore.
  • Higher spending by specific ministries was identified as a key factor.
  • Effort to recoup ₹28,000 crores to the Contingency Fund of India.


Reflects challenges in maintaining fiscal discipline. Highlights the need for careful budgetary management strategies.


Credit Rating Agencies in India:

  • India has seven registered agencies, including CRISIL, CARE, ICRA, SMREA, Brickwork Rating, and India Rating and Research Pvt. Ltd.
  • These agencies evaluate financial strength, focusing on the ability to meet debt obligations and offer crucial information about issuers of bonds, including government entities and companies.
  • Globally Credit rating agencies are Dominated by three major agencies: Moody’s, Standard & Poor’s, and Fitch.
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