Answer to Question #140800 in Economics for Simi

Question

Explain why the Indian government’s budget deficit might be in a large deficit?

Answer 1

India’s fiscal deficit reached 109% of the full-year target in the first five months of the ongoing financial year as the coronavirus pandemic continued to be a drag on the government’s finances.

India imposed the world’s biggest lockdown. That pushed the already slowing economy toward a rare annual contraction in more than four decades. India’s real GDP contracted 23.9% in the April-June quarter.

So, the one of the main reasons for very high budget deficit is pandemic and the resulting lockdown.

Source:

https://www.bloombergquint.com/economy-finance/indias-april-august-fiscal-deficit-reaches-109-of-budget-target