India's fiscal slippage announced in budget for FY21 is modest: Fitch

The new budget now explicitly recognizes borrowing from the National Small Savings Fund of 0.8% of GDP in both FY20 and FY21, to finance food subsidies., Fitch said

Rating agency Fitch on Monday said the fiscal slippage announced by government in budget for FY21 is modest relative to its previous targets, given slowing growth momentum. It is consistent with rating expectations articulated in December 2019 when agency affirmed India’s 'BBB-' rating with a Stable Outlook.

Government has set fiscal deficit target at 3.5 per cent of Gross Domestic Product (GDP) for next fiscal year 2020-21 (Fy21). The centre has also revised estimate for fiscal deficit in Fy20 to 3.8 per cent as against earlier projection of 3.3 per cent. It used provisions in Fiscal Responsibility & Budget Management (FRBM)