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India's budget deficit ballooned to a record last year, as the government borrowed more to spend its way out of the pandemic-induced slump.
The fiscal gap for the year ended March 31 touched 9.3% of gross domestic product, data released by the Controller General of Accounts showed Monday. That's the widest on record, and is narrower than the government's revised 9.5% goal set in February.
The government surpassed its revenue target, collecting 105% of its revised 15.6 trillion rupees goal for the full year, data showed.
The situation isn't unique to India. Emerging-markets saw their average budget gap double to 9.8% of GDP in 2020 from 4.7% in 2019 as they spent more to cushion their economies against the pandemic, according to the International Monetary Fund. India targets to narrow the deficit to 6.8% in the current fiscal year started April 1.
Nations should continue to spend to support health-care systems and households until Covid-19 spread is curbed globally and the economic recovery strengthens, the IMF said in its Fiscal Monitor report last month.
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