Ashoka estimates fiscal deficit challenges amid global uncertainty

Ashoka’s Isaac Centre for Public Policy estimates challenges regarding the fiscal deficit. This comes as the economy showed resilience, with real gross domestic product growing 7.8% in the April-June quarter, but also facing rising inflation and external shocks. The estimates highlight how lower excise collections and higher fertilizer and liquefied petroleum gas subsidies could impact fiscal arithmetic if energy disruption continues until December.

The estimates provide insight into the fiscal challenges facing policymakers as they prepare for the budget presentation on February 1. The report notes that while private consumption is strong, the external environment, including rising crude oil prices and US political uncertainty, adds pressure to the economy.