FY22 fiscal deficit likely to be close to revised target of 6.9%

The FY22 fiscal deficit is likely to come in at around the revised figure of 6.9 percent, according to people in the know.

The government in the third Supplementary Demands for Grants has a good additional net cash outgo of Rs 1 lakh crore odd. This has probably been balanced out or offset by a similar amount of savings by other departments and ministries.

The government is planning to bring the fiscal deficit target below 4.5 percent of GDP by 2025-26.

Fiscal deficit is the total money spent by the government in excess of the total income earned. It is closely tracked by the bond markets and has implications for interest rates in the system.

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