08 January, 2020
3 Min Read
Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Prelims and Mains focus: about the govt’s move to cut expenditure and its implications on the economy; about fiscal deficit
News: The government is likely to cut spending for the current fiscal by as much as Rs.2 trillion (Rs. 2 lakh crore) as it faces one of the biggest tax shortfalls in recent years.
Economic growth slowed for six consecutive quarters to 4.5% in JulySeptember, despite a 135basispoint cut in interest rates by the Reserve Bank of India (RBI) since February 2019.
Likely implications of the move
The Centre is likely to keep fiscal deficit under 3.8% of GDP. It is likely to announce additional borrowing of Rs.300500 billion for the current year to match the revised fiscal deficit.
About fiscal deficit
Source: The Hindu
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