Sidestepping policymakers' obsession with the fiscal deficit, Governor Shaktikanta Das on Thursday said the Reserve Bank of India was not worried over the Centre missing its fiscal deficit target but would like to see greater clarity on steps to push economic growth.
The government data recently showed fiscal deficit has hit 102.4% of the FY20 budget estimate at Rs 7.2 lakh crore in the April-October period.
However, Finance Minister Nirmala Sitharama has repeatedly said that she intended to stick to the fiscal glide path of 3.3% this year.
Most of the brokerages and independent analysts have junked her claim saying it may slide to 3.6% or thereabouts. Morgan Stanley is one of those.
Das, the bureaucrat- turned-central banker, however, did not agree with brokerage firms. He said usually the fiscal gap goes up in the second and third quarter and comes down in the fourth quarter as revenue mop-up increases and suggested the final numbers should be awaited.
The August corporate tax cut is expected to have around 40 basis point impact on the fiscal deficit this year. The slowdown in tax collection could make the matter worse. The fiscal deficit number till October would have looked much uglier had the RBI not provided a cushion through an extra dividend.
RBI is expected to transfer Rs 1.76 lakh crore to the government coffers following the recommendation by the Bimal Jalan-led committee. The government had budgeted only Rs 90,000 crore as dividend from the RBI this year. The additional sum of Rs 58,000 crore comes over and above the budget estimate.