New Delhi: The government is likely to achieve the fiscal deficit target of 4.4 per cent of GDP in FY2016, and may even better it, a positive signal to global investors about India’s commitment to fiscal management, said Ranen Banerjee, PwC partner and economic advisory services leader.The recent increase in the nominal GDP growth target by the National Statistics Office from 10.1 per cent to 8 per cent has increased concerns about the government’s ability to meet the fiscal deficit target.Although the nominal GDP growth rate has been reduced to 8 per cent from 10.1 per cent, the absolute numbers are almost matching the budget estimates, he said, which means the denominator is not shrinking and the government should easily meet the 4.4 per cent fiscal deficit target.It is to be noted that the government has exceeded its fiscal deficit target of 4.8 per cent of GDP for FY20 as against 4.9 per cent of GDP.“There is actually scope for improvement. We believe that alternatively, we can peg it at 4.3 per cent because that is kind of an indication that we are actually not only meeting the fiscal consolidation targets, but we are also achieving them,” Banerjee said.Finance Minister Nirmala Sitharaman, in her budget speech last year, had pegged the fiscal deficit for FY2026 at Rs 15.69 lakh crore, or 4.4 per cent of GDP.Noting that the revision of nominal GDP growth by the National Statistics Office is in line with expectations, Banerjee said the soft wholesale price index, especially food and oil prices, has contributed to a lower deflator, resulting in a smaller gap between nominal and real GDP growth.However, he said, lower nominal GDP growth is expected to impact tax revenues, leading to an estimated shortfall of Rs 1.9 trillion in gross tax revenues.After accounting for GST compensation cess, the shortfall could be around Rs 75,000 crore or Rs 0.75 trillion, he said.Despite this, the central government is expected to get a buffer of about Rs 0.5 trillion from the unutilized GST compensation cess fund.On the expenditure side, he said revenue expenditure is likely to be 2 per cent lower than the budget estimate, while capital expenditure is expected to be close to 100 per cent of the budgeted amount.As a result, while the fiscal deficit target can still be achieved, the shortfall in tax revenue is likely to be compensated by savings on the expenditure side, he said.