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Citing three Indian government sources early Tuesday, Reuters reported that the Indian government is likely to cut spending for the current fiscal year by as much as 2 trillion Indian rupees as it faces one of the biggest deficits in the recent years.

 A 2 trillion-rupee reduction would be about a 7% cut in total spending planned for the year.

One of the official said: “But with a revenue shortfall of about 2.5 trillion rupees, the government has little choice to keep its deficit within acceptable limits”.

Lack of demand and weak corporate earnings growth in the economy led to lagging tax collections this year. Analysts said growth will be hurt, per Reuters.

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