While presenting her 2021-22 Union Budget, Finance Minister Nirmala Sitharaman had set a fiscal deficit target of 6.8 per cent of nominal gross domestic product (GDP) against the 2020-21 Revised Estimate of 9.5 per cent. The fiscal correction in the upcoming 2022-23 Union Budget is unlikely to be that steep.

       Even as discussions among top Budget-makers are ongoing, the fiscal deficit target for 2022-23 may likely be in the range of 6.5-6.8 per cent. This draws from two factors. First, the Centre is unlikely to meet this year’s fiscal deficit target due to a higher expenditure ...