Fiscal deficit touches 21.3% of target
The Centre has given ₹1.6 lakh crore to states as devolution of share of taxes
NEW DELHI: The central government’s fiscal deficit stood at ₹3.21 lakh crore or 21.3% of the budget estimates at the end of July, as per the data released by the Controller General of Accounts (CGA) on Tuesday.
The deficit figures this fiscal appear much better than the previous financial year, when it soared to 103.1% of the estimate, mainly on account of a jump in expenditure to deal with the Covid-19 pandemic.
The fiscal deficit or the gap between expenditure and revenue for 2020-21 was 9.3% of the Gross Domestic Product (GDP), better than 9.5% projected in the revised estimates in the Budget in February.
As per the data, the central government’s total receipts stood at ₹6.83 lakh crore or 34.6% of corresponding BE 2021-22 up to July 2021. The total receipts were 10.4% of the BE of 2019-20 in the same period of the last financial year. Of the total receipts till July 2021, ₹5.2 lakh crore was tax revenue (net to centre), ₹1.3 lakh crore non-tax revenue and ₹14,148 crore non-debt capital receipts.
Non-debt capital receipts consist of recovery of loans worth ₹5,777 crore and disinvestment proceeds of ₹8,371 crore. Further, ₹1.6 lakh crore was transferred to state governments as devolution of share of taxes by the Centre up to July 2021.
The government’s total expenditure was ₹10.04 lakh crore or 28.8% of the corresponding BE 2021-22. The expenditure was 34.7% of BE of 2019-20 in the same period last fiscal.
Of the total expenditure during the first four months of the current fiscal, ₹8.7 lakh crore was on the revenue account and ₹1.2 lakh crore on the capital account.
Out of the total revenue expenditure, ₹2.2 lakh crore was on account of interest payments and ₹1.2 lakh crore towards major subsidies.
“I think the 6.8% deficit target is likely to be met... The Govt could probably even better it, but I have a feeling they will not and instead choose to spend any additional revenues to support the revival process,” Axis Bank’s chief economist Saugata Bhattacharya said.
The government has pegged this fiscal’s deficit at 6.8% of the GDP. Improving tax collection should provide relief as experts say that the numbers can be achieved easily.