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ADB Cuts India GDP Growth Forecast for FY20, Govt Expected to Miss Fiscal Deficit Target for FY20

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 11, 2019 12:46 PM 1 min read

Govt likely to miss fiscal deficit target for FY20. ADB Cuts India GDP Growth Forecast for FY20.



Govt likely to miss fiscal deficit target for FY20.

Close Miss: Government is likely to miss its budgeted fiscal deficit target of 3.3% for FY20. The actual could be anywhere between 3.5% and 3.8% of the GDP.


The Fiscal Responsibility and Budget Management (FRBM) Act, after its amendment in 2018, allows a fiscal deficit slippage of not more than 0.5% for any given year, provided there are justifications, which may include a war, national security, severe collapse in the agriculture sector, a major natural calamity, big structural economic reforms, or the decline in real output growth of a quarter by at least 3 percentage points below its average of the previous four quarters. BS

ADB cuts India's GDP growth forecast for FY20.

A Gloomy Forecast: The Asian Development Bank (ADB) has slashed India's GDP growth forecast for FY20 to 5.1% due to slump in consumption affected by slow job growth and rural distress aggravated by poor harvest.


In September, ADB had forecasted India's GDP to grow 6.5% in 2019-20 and 7.2% in the year thereafter. Livemint


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