Government Says Fiscal Deficit May Overshoot Budget Estimates In 2020-21

Government’s fiscal deficit is projected to overshoot the initial estimates, 3.5 per cent of GDP, in the financial year ending in March, the government said in an economic survey presented to parliament on Friday.

“In order to sustain the recovery in aggregate demand, the government may have to continue with an expansionary fiscal stance,” the report said, adding the growth recovery would facilitate buoyant revenue collections in the medium term and enable a sustainable fiscal path.

The survey, which comes just ahead of the union budget for the new fiscal year that Finance Minister Nirmala Sitharaman is set to present on Monday, also forecast a “V-shaped” economic recovery.