It is also quite difficult to comprehend why all hell must break loose, if the fiscal deficit turns out to be 3.5% for the year, instead of 3.2%. This ₹5.94 lakh crore shortfall is euphemistically termed as the fiscal deficit. But this tells you why even a minor slippage in the fiscal deficit is so keenly watched. India’s fiscal deficit in the past ten years (based on actuals) has hovered between 3.5% and 6.4% of nominal GDP. With the number edging up from ₹5.2 lakh crore in FY14 (RE) to ₹5.9 lakh crore by FY18 (RE), fiscal deficit as a percentage of GDP has declined from 4.5% to 3.5%.

Source: The Hindu February 11, 2018 16:30 UTC