Why Fiscal Deficit of India is Rising?

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The fiscal deficit in respect of India is going to be rising in the coming years especially for 2012-2013 and may be till when general elections are going to take place in the country.

World Bank foresees a fiscal deficit of 5.6% of the GDP for year 2012 and main reasons for sky rocketing fiscal deficit are as appended below:

  • Declining Tax revenues
  • Unbudgeted subsidy like Food security bill (22%)
  • Fuel subsidy
  • Fertiliser subsidy

It is time that Prime Minister Manmohan Singh rises to the occasion and make India a force to reckon with and people call him the reformist rather than an individual who started the reforms and left it midway.

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