OVERSPENDING FOR GROWTH

The government has bitten the fiscal bullet and taken the option of diverging from the fiscal deficit glide path in favour of stimulating growth. The Budget, presented by Finance Minister Nirmala Sitharaman, has taken the 0.5 per cent escape route provided by the Fiscal Responsibility and Budget Management (FRBM) Act and relaxed the fiscal deficit — the amount by which its expenses exceed receipts — target from 3.3 per cent to 3.8 per cent of GDP in 2019/20. This without taking into account the ₹1.72 lakh crore raised through extra-budgetary resources. If these are added, the fiscal deficit goes up to 4.6 per cent. The government plans to raise ₹1.86 lakh crore through extra-budgetary resources in the next financial