Finance Minister has announced the fiscal deficit target for 2019-20 at 3.3% of GDP from 3.4% set in the Interim Budget presented on February 1, 2019.
Fiscal deficit is the amount of money that the government needs to borrow in a given year because their expenses were more than their revenues.
The main reason for decrease in fiscal deficit target is that there was an increase on the revenue side while expenditure is being controlled.
To achieve the fiscal deficit target,the government is relying on (a)disinvestment income (b)higher taxes on the rich and (c)increased excise duties on petrol,diesel,precious metals and tobacco products.
The government has budgeted a higher disinvestment target for 2019-20 of ₹1.05 lakh crore compared to the ₹80,000 crore budgeted in the previous year.Disinvestment is defined as the action of an organisation or government selling or liquidating an asset or subsidiary.
Apart from this,the government has budgeted a dividend from the Reserve Bank of India amounting to about ₹90,000 crore.