India must seek credible steps to ensure that it returns to the path of fiscal rectitude once the pandemic is over, 15th Finance Commission Chairman N K Singh said on Monday. He was speaking at the CSEP-World Bank Seminar on fiscal governance, news agency PTI reported.
According to him, the country's debt profile is neither worrisome nor comforting. He suggested being mindful of the debt situation while seeking more fiscal stimulus. "If you look at the total fiscal stimulus of the... government which is upwards of 12-13 per cent, when some people advocate greater fiscal stimulus, I think we need to be careful", Singh said.
The gross borrowing from the market for the current fiscal would be around Rs 12 lakh crore. The Budget pegged fiscal deficit at 6.8% of the GDP for the current fiscal year, lowering it from 9.5% in the previous financial year.
India's fiscal deficit stood at 9.3% of the Gross Domestic Product in FY 2020-21. This was 0.2% lower than the revised estimate of 9.5%. The Budget 2020-21, presented before the COVID-19 lockdowns, had set a fiscal deficit target of 3.5 per cent of GDP.
The Government proposed to bring down the fiscal deficit to 4.5% of the GDP by FY 2025-26 in its recent budget.