Mumbai, Nov 06(HS): Fitch Solutions, a consultancy firm on various issues, including risk aversion, raised its estimate of India’s Fiscal Deficit on Wednesday. In the current fiscal year 2019-20, the fiscal deficit can remain at 3.6 percent of the gross domestic product (GDP). Estimates of fiscal deficit have been raised in view of sluggish economic growth and loss of revenue collection due to a reduction in corporate tax rates. It was earlier estimated to be at 3.4 percent of GDP.
Fitch Solutions said that the revenue a collection could be lower than the budget estimate for 2019-20 due to the decrease in GST collection and corporate tax collection. Fitch said, in view of this, we are increasing our fiscal deficit estimate from 3.4 percent to 3.6 percent for 2019-20.
Due to this, the firm estimated the fiscal deficit to increase, the research firm said, “We believe that with the intention of not cutting fiscal spending, sluggish economic growth and the government’s corporate tax rate reduction will reduce revenue collection.” For this reason, we have increased the estimate of fiscal deficit.
