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India’s fiscal deficit exceeds full year target in October-end

03 Dec 2018 Evaluate

The Controller General of Accounts (CGA) in its latest data has showed that India’s fiscal deficit, the gap between expenditure and revenue, in the first seven months of current financial year (FY19) came in at Rs 6.24 lakh crore or 103.9% of the FY19 Budget target, on the back of lower revenue collections. It noted that the fiscal deficit was 96.1 percent of the Budget Estimate (BE), at end of October 2017-18. The country’s fiscal deficit for FY19 is budgeted at 3.3% of the GDP against the actual of 3.5% in FY18.

According to the data, the revenue receipts of the government totalled Rs 7.88 lakh crore or 45.7% of the BE for 2018-19 as compared to 48.1% of BE last year. It stated that the government has budgeted to mop up Rs 17.25 lakh crore revenue during the current fiscal. It also indicated that tax revenue was 44.7% of target as compared to 51.6% achieved in the comparable period of the last year. Data further highlighted that the Centre’s total expenditure at October-end was Rs 14.56 lakh crore or 59.6% of the BE. It added that the expenditure in terms of percentage of the BE was marginally higher in the year-ago period.

The CGA has said that fiscal deficit figure shown in monthly accounts during a financial year is not necessarily an indicator of fiscal deficit for the year as it gets impacted by temporal mismatch between flow of not-debt receipts and expenditure up to that month on account of various transitional factors both on receipt and expenditure side, which may get substantially offset by the end of the financial year.

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