Budget 2020: FY21 fiscal deficit likely to be around 3.5% of GDP

In the pre-Budget meetings, economists and experts have been advising Sitharaman and Prime Minister Narendra Modi to leave aside fiscal concerns

Union Finance Minister Nirmala Sitharaman could target a fiscal deficit of around 3.5 per cent of gross domestic product (GDP) for 2020-21 (FY21) in the upcoming Union Budget, Business Standard has learnt.

According to the existing medium-term fiscal framework, the Centre is targeting a fiscal deficit of 3 per cent of GDP for the coming year. Going by the projected nominal GDP for FY21 of Rs 227 trillion in the recently released National Infrastructure Pipeline (NIP) report, a slippage from that to 3.5 per cent could lead to an extra spending room of around Rs 1.13 trillion.

For 2019-20 (FY20),