Fiscal Deficit and Goods and Services Tax (GST) in India: Issues and Challenges

The Fiscal deficit of India is currently increasing at very fast rate and strict measures needs to be undertaken to bring it under control to avoid serious consequences. According to Kelkar committee report, the trends in the current year, 2012-13, suggests a likely fiscal deficit of around 6.1 percent which is far higher than the budget estimate of 5.1 percent of GDP, if immediate mid-year corrective actions are not taken. Runaway fiscal deficits, leading to unsustainable levels of public debt, can cause diverse forms of macroeconomic imbalances varying with the means through which the deficit is financed.