Leading Japanese brokerage Nomura on Thursday said the government could miss the fiscal deficit target of 5.3 per cent by 50 basis points on poor revenue mop-up.
"Although purse-strings are being tightened, we expect a fiscal deficit of 5.8 percent of GDP this fiscal, as revenue collection continues to be disappointing," Nomura India chief economist Sonal Varma said in a research note.
The government is cutting back on spending by 10 per cent. After growing near 20 per cent y-o-y during the April-August period, the government spending rose only 2.9 per cent y-o-y during September-October season.
Further confounding the matter for the government is the fall in the tax mop-up numbers, Nomura said.
Revenue collection during the April-October period totalled just 42 percent of the budget target, compared with a historical average of 50 per cent, reflecting an 8
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