China can afford to expand its fiscal deficit this year while reining in risks associated with the overall debt level, Finance Minister Lou Jiwei said in response to Premier Li Keqiang’s Government Work Report, which vowed to continue to fund massive state-led infrastructure projects while lowering tax levels for more industries. The government will raise the level of deficit to allow for the capital outlays needed for the new projects, Lou said. China plans to raise the deficit-to-GDP ratio to 3% this year, from 2.3% in 2015. Finance Minister Lou Jiwei also ruled out the possibility of raising the monthly income tax exemption threshold, which has remained unchanged since being raised in 2011 from CNY2,000 to CNY3,500. He said the government instead is considering adopting various exemption standards based on individual financial burdens.