April-May fiscal deficit at 43% of Budget estimates

THE Centre’s fiscal deficit for the first two months of FY17 was about

R2.29 lakh crore or 42.9% of the fullyear target of R5.34 lakh crore. In the same period last year, the deficit was 37.5% of the corresponding annual target.

In April-May this year, capital (Plan+non-Plan) spending was R33,231 crore or 13.5% of the full-year target, while it was R37,743 crore (15.6%) in the year-ago period. Plan expenditure stood at R90,570 crore or 16.5% of the full-year estimate, an improvement compared to R62,106 crore (13.3%) in the year-ago period. Spending on rural development, urban development, agriculture, aviation and power topped under this category. The April-May net tax collection was

R49,690 crore, which is 4.7% of the estimate for the full year; in the corresponding period a year ago, the same stood at R19,889 crore or 2.2% of that year’s target. Revenue receipts during April-May were

R69,060 crore, or 4.8% of the full-year target; in the same period last year, revenue receipts were 4.4% of the full-year target.

According to the data compiled by the Controller General of Accounts, the total expenditure was R2.98 lakh crore in April-May or 15.1% of the budget estimate (BE) for the full year. Total expenditure in the corresponding period last year was R2.63 lakh crore, or 14.8% of the BE.

On Wednesday, the Centre accepted the 7th Pay Commission’s recommendations regarding the remuneration of Central gover nment staff (even as it has deferred a decision on those related to allowances) and estimated that this would cost it R84,933 crore in FY17.

While the Centre and the railways have provided (although the for mer did not make this explicit in the general Budget) about

R74,500 crore in FY17, they will have to find another R10,000 crore to meet the outgo of

R84,933 crore. Analysts estimate that the Centre would get R13,000 crore in taxes from the gover nment staff due to the pay hike, but official sources indicated that this was foreseen at the time of making the Budget.

If the Centre accepted the pay panel’s proposals in full and released the entire amount to its staff and pensioners in FY17, the additional outgo would be R1.02 lakh crore.