India Lets Fiscal Deficit Widen to 4.8% as Iran War Lifts Subsidy Costs
Updated
Updated · Reuters · Jun 12
India Lets Fiscal Deficit Widen to 4.8% as Iran War Lifts Subsidy Costs
3 articles · Updated · Reuters · Jun 12
Summary
India is prepared to let this fiscal year's budget deficit widen to 4.8% of GDP—50 basis points above its 4.3% target—as Iran war-related energy shocks strain public finances, Bloomberg reported.
About 90% oil import dependence has left India exposed after higher crude prices and Strait of Hormuz disruptions pushed state fuel retailers to raise petrol and diesel prices by roughly 8%.
Subsidy pressure is building even after the government cut household cooking-gas support, while a government official earlier said fertiliser subsidies are likely to jump 20% this fiscal year.
Officials plan to reassess the fiscal outlook later this year once non-tax revenue and subsidy needs are clearer, and are also weighing spending cuts across ministries to contain the gap.