India likely to trim fiscal deficit target as Omicron cases rise

India is aiming for a fiscal deficit of 6.3% to 6.5% of gross domestic product for the next financial year, a less ambitious target than previously planned as Covid-19 infections threaten the economic recovery, three government officials said. Finance Minister Nirmala Sitharaman is due to unveil the 2022/2023 federal budget on Feb. 1 and officials said the thinking was that sharp cuts in government expenditure could hurt growth prospects.
India's caseload of coronavirus infections is surging, fuelled by the Omicron variant and the worry is that consumer and business spending will be hit, leaving the government with little choice but to step in. The plan now is to target a 30-50 basis point cut in the fiscal deficit for the next financial year, the officials involved in the discussions said. They declined to be named as they were not authorized to speak to the media.