Why the FY20 fiscal targets are a long stretch for Modi 2.0 govt

The Street will take a higher fiscal deficit in its stride as long as the govt is transparent and realistic about its projections

In the 2019-20 interim budget, the then interim Finance Minister Piyush Goyal had announced that the fiscal deficit target for the current fiscal year has been targeted at 3.4 per cent of gross domestic product. This in itself was a deviation from the earlier fiscal roadmap, which had forecast fiscal deficit at 3.1 per cent of GDP.

However, given the disappointing tax collections in 2018-19, which will impact the collections for 2019-20 in terms of revenue growth required, and higher expenditure commitments than targeted in the interim budget mean that the fiscal deficit target for 2019-20 may be a step