NEW DELHI: The government’s efforts at steering the economy towards the path of fiscal consolidation seem to be faltering. On Wednesday, the government reported a fiscal deficit of Rs 6.77 crore for the first 10 months of 2017-18, which is 113.7 per cent of the revised target set by the government for the whole year.
The government had pegged its fiscal deficit target at Rs 5.33 lakh crore, which was revised to Rs 5.93 crore for the current fiscal ending March 31.
While capital expenditure during the period had stood at Rs 2.64 lakh crore, revenue deficit also remained a matter of concern at 4.8 lakh crore due to lower than expected tax collection. It was 109.2 per cent of the revised Budget estimate.
In the first 10 months of FY18, net tax receipts were Rs 9.7 lakh crore, government data showed. A day before, the goods and services (GST) collection dipped marginally to Rs 86,320 crore in January.
Earlier, Moody’s had warned that the revenue deficit has worsened the quality of fiscal deficit.
Total receipts from revenue and non-debt capital of the government during the period amount to Rs 11.63 lakh crore or 71.7 per cent of revised estimate.
In the Union Budget 2018 speech, Finance Minister Arun Jaitley had said that the fiscal deficit target for the ongoing year has been raised to 3.5 per cent of gross domestic product from 3.2 per cent.
The government also revised its fiscal deficit target for next year to 3.3 per cent from 3 per cent set earlier.
Economists have already warned against fiscal challenges. Former RBI governor D Subbarao on Wednesday flagged fiscal deficit concerns saying the country is no longer the sweet spot due to rising oil prices.
“India has been in a sweet spot over the past four years because of the sharp fall in global crude oil prices, cushioning both fiscal and current account deficits. But that comfort has now come to an end with the prices firming up,” noted Subbarao.