Fiscal Deficit (Union government) for November 2019.

The fiscal policy remains neutral to the stagnating economy.

The fiscal deficit in terms of rolling 12-month sum as a % of GDP has been improving since 2012, which is the longest period of consistent improvement in the last two decades. Although there has been a slight deterioration in fiscal deficit from 3.1% in August 2019 to 3.7% in November 2019, it continues to remain between the range of 3% to 4% despite the slowdown in the economy since April-June 2018. Hence, suggesting that the Modi government continues to stay prudent about the fiscal measures amidst concerns of an economic slowdown.

The 12month average YoY growth in the government's total expenditure has been accelerating since June 2019. But, it remains low when compared to the growth in government expenditure between the years 2008 and 2009 following the Lehman crisis.

The Indian government seems to be keen on achieving the fiscal deficit target of 3.3% of GDP for the fiscal year 2019-20 (FY2019-20 represents April 2019-March 2020) by keeping the expenditure in check. However, the possibility of a recession in the near future due to the continual slowdown in economic growth since April-June quarter 2018 hints that it's about time the government let the fiscal deficit worsen to stimulate the economy.