Reserve Bank of India (RBI) Governor Shaktikanta Das recently said that India’s gross fiscal deficit is on the expected lines and adhering to budgetary targets.
Speaking earlier this week while speaking at the “Governor Talks” event organised on the sidelines of the World Bank-International Monetary Fund (IMF) Spring Meetings in Washington DC, the RBI governor added that the current account deficit is expected to be around 2.5 per cent of the GDP in 2018-19.
The statement is the first official confirmation at a senior level of the government achieving the fiscal deficit target of 3.4 per cent in the previous fiscal 2018-19.
The Controller General of Accounts (CGA) normally releases the fiscal deficit figures of the previous fiscal by May 15.
Das also said the country’s current account deficit (CAD) in 2018-19 is expected to come in at around 2.5 per cent of the gross domestic product (GDP).
According to the government, India’s balance of payment situation eased mainly on account of falling global oil prices.
RBI, while deciding its rate of interest, also takes into account these macro data indicators of the Finance Ministry.
Earlier this month, the RBI cut the repo, or its short-term lending rate for commercial banks, by 25 basis points to 6 per cent, and lowered the current fiscal’s GDP growth forecast to 7.2 per cent.
“The rate cut is in consonance of achieving the medium term objective of maintaining inflation at the 4 per cent level while supporting growth,” the statement, announcing the RBI’s first bi-monthly monetary policy review of the fiscal, said.