Survey calls for relaxing 3.3% fiscal deficit target

New Delhi: The Economic Survey 2020 has said there may be a need to relax the fiscal deficit target for FY20 to revive growth.

"Considering the urgent priority of the government to revive growth in the economy, the fiscal deficit target may have to be relaxed for the current year," said the survey presented in Parliament on Friday.

The Medium Term Fiscal Policy (MTFP) Statement presented with the Budget 2019-20 had pegged the fiscal deficit target for 2019-20 at 3.3 per cent of GDP, which was further expected to follow a gradual path of reduction and attain the targeted level of 3 per cent of GDP in 2020-21, and continue at the same level in 2021-22.

The fiscal deficit target for the current financial year may need to be relaxed to revive growth. While it mentioned that weak global growth has impacted India, it also acknowledged the fact that investment has slowed down due to domestic financial sector issues.

Apart from highlighting the need for wealth to be distributed among all classes, the Economic Survey also highlighted 10 new ideas that could benefit markets and the Indian economy at large. The Economic Survey also said that the government must deliver on reforms quickly as it is the only way to enable an economic recovery in the upcoming fiscal.

Improving governance in public sector banks and the need for better disclosure of information other key steps recommended by the Economic Survey.