The fiscal deficit for the year 2018-’19 was 3.39% of the Gross Domestic Product, marginally lower than 3.4% estimated in the revised estimates of this year’s interim Budget presented in February, Mint reported, citing data from the Controller General of Accounts.

Earlier, the fiscal deficit target for 2018-’19 was 3.3% of the GDP, but Finance Minister Piyush Goyal announced on February 1 that the government had revised it upwards to 3.4%.

In absolute terms, the fiscal deficit for the year was Rs 6.45 lakh crore as against Rs 6.34 lakh crore of the revised estimates. The fiscal deficit as a percentage of GDP is still lower than the estimate because of an increase in the GDP itself.

Fiscal deficit occurs when a government spends more than the revenue it earns. A fiscal deficit also forces the government to borrow, which means that there is less credit available for other borrowers.