The Comptroller General of Accounts has released data today indicating that the Indian government has breached its fiscal deficit target for the current year in the April-November period, with several months to go. The deficit is at 112% the budgeted gap for the year - compared to 85.8% of the cap at this time last year. Analysts are expecting the fiscal deficit this year to come to 3.5%-3.7% of GDP, compared to the target of 3.2%. Lower tax collections post GST and tax cuts has led to the money deficit.

The government has already said that it plans to borrow more money, upto Rs. 50,000 crores via the securities route, so no severe belt-tightening is as yet on the horizon. While government spending has jumped this year compared to the previous year, the move to GST has also upended tax revenue. December returns are seeing a massive 14% drop from the collections in August, the first month of tax collection and return filing under the new indirect system.  Weak implementation and additional tax cuts with an eye to state elections, have driven the lower revenues.