Gross fiscal deficit in relation to GDP India FY 2015-2023
The impact of geo-political situation
The Russia-Ukraine aggravated the supply disruptions impacting the prices of fuel, food and other essential commodities. The government's fiscal policy response was additional spending on food and fertilizer subsidies, accompanied by specific duty cuts to shelter the consumers from high imported prices.
Impact from the pandemic
Due to concerns over gradually slowing economic growth, the government increased its fiscal spending in early 2019. With the onset of the coronavirus (COVID-19) and consequent lockdown, the unprecedented financial stimulus package led to the worsening of the gross fiscal deficit. This further stressed the tax revenue system across the country. A major impact of the pandemic was the projection of negative quarterly growth of GDP in June 2020 across India. The fiscal deficit, as of May 2020, was estimated to be approximately two trillion Indian rupees.