NEW DELHI: Better than expected revenue collection has helped the government to narrow its fiscal deficit for the first quarter (April-June) to Rs 2.74 lakh crore or 18.2% of the full year’s Budget estimate, giving it the confidence to achieve its fiscal deficit target easily.
According to data released by the Controller General of Accounts (CGA) on Friday, the fiscal deficit was at Rs 2,74,245 crore by June 30. The Fiscal deficit situation this financial year looks even better than the pre-pandemic levels. In 2019-20, the fiscal deficit till June was Rs 4,32,055 crore.
For the whole financial year fiscal deficit was 9.3% of the Gross Domestic Product (GDP), better than 9.5% projected in the revised estimates in the Budget in February.
“We are sure to achieve the fiscal deficit target. We have managed economy better in the second wave by allocating money where the need is and curtailing the wasteful expenditure.
Also the revenue receipts are much better. We should do better than expected,” a senior official in the finance ministry said.
For the current financial year, the government has kept the fiscal deficit target at 6.8% of GDP or Rs 15,06,812 crore.
As per CGA data, the government received Rs 5.47 lakh crore, including Rs 4.12 lakh crore of tax revenues, Rs 1.27 lakh crore of non-tax revenues and Rs 7,402 crore of non-debt capital receipts. So far it has managed to receive Rs 3,996 crore from the disinvestment proceeds.
According to the statement by the finance ministry, the Centre has transferred Rs 1,17,524 crore to state governments as devolution of share of taxes by the government of India up to June 2021.
In terms of expenditure, by the end of June, CGA said the government spent Rs 8.21 lakh crore, which was 23.6% of the Budget estimate out of which Rs 7.10 lakh crore was on revenue account and Rs 1.11 lakh crore was on capital account.
Out of the total revenue expenditure, Rs 1.84 lakh crore was for interest payments and about Rs 1 lakh crore was on account of major subsidies.
“The sharp jump in tax and non-tax receipts and mild contraction in revenue expenditure, curtailed the government of India’s fiscal deficit to an eight-year low in Q1 FY22-less than half of last-year’s level of Rs 6.6 lakh crore recorded during the nationwide lockdown,” said Aditi Nayar, chief economist at ICRA.