India is on track to meet its budget deficit target this year and will likely aim to narrow the gap to 6.3% of gross domestic product next year, according to the nation’s largest lender.
SBI economist Soumya Kanti Ghosh has noted, assuming that the government keeps the expenditure growth at 8% over FY22 estimates at Rs 38 lakh crore in FY23 and receipts would grow by around 10.8%, it would lead to fiscal deficit of around Rs 16.5 lakh crore or 6.3% of GDP in FY23.
“The main objective of the budget should be to create an environment that will give further impetus to growth,” by giving higher weightage to a short-term stabilization policy rather than long term policy, the report further added.
As the country battles another wave of the Covid-19 pandemic, the government should consider exempting health insurance products from GST, at least for all retail and health focused products, it says.
SBI Research suggests Fiscal deficit targets of 6.3% for FY23
