Robust GST collections in October raise fiscal deficit concerns

The total GST target for FY19 is pegged at Rs 12.5 trillion

Robust goods and services tax (GST) collections in October notwithstanding, the government is likely to miss its budgeted GST target for the current financial year, which will make it difficult to rein in the fiscal deficit at 3.3 per cent of gross domestic product (GDP).

The fiscal deficit is likely to touch 3.5 per cent of GDP, notes a report by Kotak Institutional Equities. An earlier report by economists at YES Bank had pegged the deficit at 3.7 per cent of GDP in the worst case scenario. 

While direct tax collections have been robust so far, much of the concerns