Garg, who resigned from the government after he was suddenly shifted out from the finance ministry to power, in a blog post also highlighted how fiscal deficit was understated and stood at 4.66% and 4.39% in FY19 and FY18, respectively, rather than the 3.4% and 3.5% shown. India had pegged FY20 deficit in the budget presented in July at 3.3% of GDP.
Garg, a 1983 batch Rajasthan cadre officer, had served in the finance ministry’s Department of Economic Affairs from June 2017 till July 2019 when he was shifted. The blog post ‘state of Fiscal Deficit and Debt of Government of India’ on Wednesday said some of the transactions are not recorded through the Consolidated Fund of India all the time. “Some debt or liabilities are assumed outside the CFI- either in the public account or totally outside the formal accounting system of the government i.e. outside CFI and public account. Such transactions are described popularly as Below the Line, Off Budget,” he said.
Economists have time and again raised the issue of understatement of India’s fiscal deficit numbers pointing at these off budget items. The Comptroller and Auditor General (CAG) had in July in a presentation before the Finance Commission said that the central government’s key deficit figures may be considerably higher than those stated in the union budget. For some years now, Garg said, the government had been issuing ‘Fully Serviced Bonds’, raised outside the Consolidated Fund of India and Public Account.