New Delhi | Jagran Business Desk: India is likely to miss its fiscal deficit target of 3.3 per cent that it set earlier this year during the annual budget for the ongoing financial year 2019-20. The country is likely to miss its targets by 30-50 basis points due to an economic slowdown that has affected tax collection goals, reported Reuters.

The report quoting two officials said that the government is eyeing to cap its fiscal deficit of the current financial year at 3.8 per cent of GDP from its previous target. Besides this, the government is also likely to lower its fiscal deficit by 3 per cent by 2021. The report added that official names would be kept private as the proposals have not been made public.

In order to revive the economy from its six-year low of 5 per cent in the quarter ending June this year, the government has taken various efforts including corporate tax cut by 8 per cent that was expected to result in a revenue loss of 1.5 trillion rupees.

The Indian economy grew at its weakest pace since 2013 April-June quarter as consumer demand and government spending slowed amid global trade frictions.

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Finance Minister Nirmala Sitharaman has said that she will set the next budget target in February only after having a relook at the fiscal calculations.

"Whether we announce more measures or not, we are trying to cap the fiscal deficit slippage at 3.8% for the year," the official was quoted as saying by Reuters.

Direct tax collections growth from April to Oct 15 was around 3.5 per cent, 17 per cent below its tax targets, a third official said.

Meanwhile, the GST collection in September slipped to a fresh 19-month low.

The second official said the government is expected to miss a total of 2 trillion rupees tax revenue targets in the current year.

The official also said that the government could take a loan of more than 1 trillion rupees it had accumulated from its schemes for small savers to fund some expenditure targets for 2019-20, but despite that, it would have a wider deficit, as reported by Reuters.

The revenue collection is yet to be sorted out as RBI pitched in a record dividend of 1.48 trillion rupees for the current year.

Posted By: James Kuanal