NEW DELHI: Despite an underwhelming first quarter as far as the GDP growth (20.1% growth compared to 24% contraction last year) is concerned, the government’s fiscal situation continues to look rosy.
In the first four months of the current financial year, the central government has managed to keep the fiscal deficit at Rs 3.2 lakh crore, 21% of the Budget estimate of Rs 15 lakh crore. Last year during the same period, the fiscal deficit had reached `8.2 lakh crore, or 103% of the Budget estimate.
The modest looking fiscal deficit number in the April-July 2021 period was largely on account of the surge in tax collections as the Centre’s net tax collection (arrived at after deducting state’s share) grew 2.6 times to Rs 5.2 lakh crore.
RBI’s surplus transfer of Rs 99,122 crore in June this year has also boosted the government’s total revenue receipt during the April-July period. Total revenue has grown 200% to Rs 6.6 lakh crore over last year. The government is, however, lagging behind in achieving its disinvestment target of Rs 1.75 lakh crore as it has collected only Rs 8,400 crore in the first four months.
The government remained tight-fisted despite disruptions created by the pandemic. Its total expenditure in the first four month of 2021-22 was Rs 10 lakh crore against Rs 10.5 lakh crore during the same period last year. Revenue expenditure at Rs 8.8 lakh crore during the first four months of the current financial year was 7% lower than that of last year. Capital expenditure, however, saw a 15% growth at Rs 1.28 lakh crore.
“The Budget estimate for gross tax revenues of Rs 22.2 lakh crore can be achieved, even with a sizeable 7.5% contraction in the remainder of 2021-22, which appears unlikely with a deepening of the economic recovery in the ongoing quarter,” says Aditi Nayar, chief economist, ICRA.
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