NEW DELHI: The central government’s fiscal deficit reached Rs 13.2 lakh crore in the 11-month period (April 2021 - February 2022), taking a huge jump from Rs 9.4 lakh crore at the end of January. This was largely on account of a massive Rs 2.4 lakh crore devolution of taxes to states.
The fiscal deficit by February-end had touched 83% of the revised budget target of Rs 15.9 lakh crore. However, it is still lower than Rs 14.1 lakh crore in the same period the previous year thanks to a 30.7% year-on-year growth in revenue receipt, and a moderate 10% growth in revenue expenditure.
“The release of a massive Rs 2.4 lakh crore as central tax devolution to the states in the month of February 2022, by far the largest monthly release, contributed to a widening in the government’s fiscal deficit between January 2022 and February 2022,” says chief economist of ICRA Ltd Aditi Nayar.
The government’s gross tax collection till February 2022 was Rs 22.75 lakh crore, 37% more than collection in the corresponding period the previous year. The government has set a target of Rs 25.2 lakh crore, which it most likely would achieve.
However, the government is likely to miss the disinvestment target of Rs 78,000 crore by huge margin. Till February 2022, the government has only collected Rs 8,500 crore. The fical deficit target for the current financial year is 6.8% of the GDP.
Meanwhile, the government on Thursday announced its borrowing plan for the first half of 2022-23.
Out of Gross market borrowing of Rs 14.31 lakh crore estimated for 2022-23, Rs 8.45 lakh crore is planned to be borrowed in the first half.
Core Sector growth at a four-month high of 5.8%
The combined Index of Eight Core Industries grew 5.8% in February 2022, highest in four months, led by strong performances by sector such as coal, natural gas and refinery products. The production of Coal, Natural Gas, Refinery Products, Steel, Cement and Electricity industries increased in February 2022 over the corresponding period of last year. Natural gas registered a 12.5% year-on-year growth in February, followed by refinery products (8.8%) and coal (6%). However, Crude oil and fertilizer production registered a decline.