NEW DELHI: Strong revenue growth coupled with a tight leash on expenditures has helped the government keep its fiscal deficit at 46% of the budget target in the first eight month of the current financial year.
While the government’s revenue collection increased by a whopping 67% in April-November 2021, the government’s total expenditure at Rs 20.74 lakh crore during the period is just 8.8% more than the total spending during the corresponding period in the previous financial year.
Data released by the Comptroller General of Accounts for the first eight months of the government’s finance show that while revenue expenditures, the running cost of the government, have increased by a paltry 8.1%, capital expenditure has increased by 13% or by just Rs 32,000 crore to Rs 2.73 lakh crore in the first eight months of the 2021-22.
The total revenue receipt of the government till November had reached 13.6 lakh crore, which is 76% of the government’s budget target. During the same period last year, the government has managed to mop up 8.1 lakh crore in revenue, including tax, non-tax and capital receipts.
Gross tax collection in April-November 2021 grew at 50% to Rs 15.42 lakh crore. However, due to higher release of central tax devolution to the states, the same was not reflected in the net tax collections.
Due to strong revenue collection and a tight leash on expenditures, the central government’s fiscal deficit contracted to just Rs 6.95 lakh crore April-November 2021 from Rs 10.8 lakh crore in the same period last year.
However, economists believe that the government may have to incur higher expenses in the last quarter of the financial year, breaching the Fiscal deficit target of 6.8%. The government is far short of its disinvestment target of Rs 1.75 lakh crore as total proceeds from disinvestment was only Rs 9,333 crore.
Breach of target
Economists believe that the government may have to incur higher expenses in the last quarter of the financial year, breaching the Fiscal deficit target of 6.8%.