Budget 2018: Govt cuts extra loans to Rs 200 bn, FY18 fiscal deficit could reach 3.4%

In December last year, the Centre had stated that it would raise an additional Rs 500 billion from the market in this financial year

The government has announced that it is reducing additional borrowing to Rs 200.00 billion from Rs 500.00 billion earlier, in the current financial year (FY18), signalling to markets and experts about the Centre’s commitment to fiscal consolidation. 

But even then, the fiscal deficit may reach up to 3.4 per cent of gross domestic product (GDP), higher than the 3.2 per cent pegged in the Budget for 2017-18.

This reduction in borrowing largely came because the government expects the Reserve Bank of India (RBI) to transfer to it a higher-than-anticipated surplus in FY18, a few senior government sources have confirmed independently