Care Ratings revises Centre's fiscal deficit projection to 7.8% of GDP for FY21
by Nidhi Bhati
Care Ratings has revised its projections for Centre’s fiscal deficit during 2020-21 at 7.8 per cent of GDP from its earlier estimate of 9-9.5 per cent. The fiscal deficit could widen to 8.4 per cent of GDP after adding the amount borrowed for Good and Services Tax (GST) compensation to states, it added. This downward revision comes in the wake of the release of the first advance estimate of gross domestic product (GDP) for 2020-21 and the credit rating agency’s expectations on the finances of the central government. Care Ratings observed that the tax revenues of the government have been strained owing to the lockdown which halted economic activity during the first quarter of the fiscal.
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