Fiscal Deficit Estimated At 10.4% In 2021-22 If Disinvestment Target Missed: ICRA

A miss in the disinvestment target may cause the fiscal deficit to rise at Rs 16.6 lakh crore or 7.1 per cent of the GDP in the current financial year

A miss in the disinvestment target may cause the government's fiscal deficit to rise at Rs 16.6 lakh crore or 7.1 per cent of the GDP in the current financial year, rating agency ICRA said in a report.

With the state governments' fiscal deficit projected at a relatively modest 3.3 per cent of GDP in 2021-22, the general government fiscal deficit is estimated at around 10.4 per cent of the GDP, the agency said in a report.

In the base case for 2022-23, the agency sees the government's fiscal deficit moderating to Rs 15.2 lakh crore or 5.8 per cent of GDP.

Although the planned ceasing of GST compensation could cause the state governments' fiscal deficit to rise to the cap of 3.5 per cent of the GSDP set by the Fifteenth Finance Commission, the general government deficit will still compress to 9.3 per cent of the GDP in 2022-23, it said.