Large Fiscal Deficit
India’s consolidated fiscal deficit has been persistently large for many years. Although the country has made substantial progress in recent efforts to tackle the deficit, it remains a continuing concern as it presents many challenges. The existing deficit leaves little to no fiscal space for new government spending on areas which are of high social priority. Initiatives in rural and urban necessities have to be financed with some combination of higher taxes, user chargers, or by cutting existing expenditures. These necessities include: infrastructure, employment, education and healthcare. Bank financing is difficult to obtain as large deficits and unreformed banking systems reduce the private sector’s ability to do so. Released in October, the finance minister of India announced the country's fiscal deficit target for 2013-14 which is 4.8% of GDP which is expected to be accomplished over a span of five years.