Fiscal deficit hits 59 per cent of budgetary target
NEW DELHI: India’s fiscal deficit for the first two months of the financial year 2020-21 have touched 58.6 per cent of the budget target at Rs 4.66 lakh crore, on account of low revenue collection and front loading of expenditure. Data released by the Controller General of Accounts on Tuesday also shows, revenue deficit for April-May period stands at Rs 4.12 lakh crore, as against Rs 3.21 lakh crore in the same period last year.
The government’s fiscal deficit target estimated in the Union Budget 2020-21 was Rs 7.96 lakh crore, or 3.5 per cent of the GDP, but due to the slowdown and covid-19 led lockdown, but is likely to be revised due to the impact of the coronavirus-led lockdown in the economy. Economists had predicted the figures might go up substantially. This was despite the government announcing various measures including cutting many none essential expenditure under several heads, suspending announcement of any new scheme till March 30, 2021.
The government has received Rs 45,498 crore, till the May, which was 2.03 per cent of the budget estimate. In the same period, total expenditure incurred was Rs 5,11,841 crore, which was 16.82 per cent of budget estimate, mainly due to many relief measures announced during the pandemic. Tax revenues are also a point of concern. Out of the total receipt, net tax revenue was Rs 33,850 crore, while non-tax revenue was Rs 10,817 crore.
Non-debt capital receipts stood at Rs 831crore on account of recovery of loans.Further, the government said it had transferred Rs 92,077 crore to the state governments as Devolution of Share of Taxes in this period, which is Rs 7,010 crore lower than the previous year. Out of the total expenditure, Rs 4,56,635 crore was on revenue account, including Rs 78,265 crore on account of interest payments and Rs 67,469 crore due to major subsidies, while Rs 55,206 crore was on the capital account.
As the natural pace of spending is expected to be high, coupled with subdued revenue, the government had already increased its borrowing for the current year to Rs 12 lakh crore against Rs 7.8 lakh crore budgeted earlier.