Govt breaches fiscal deficit target for FY2017-18 in Nov

India's fiscal deficit, at the end of November, has breached the ongoing financial year’s target, touching 112 per cent of the budget estimate for the 2017-18 financial year, mainly due to lower GST collections and higher expenditure. In absolute terms, the fiscal deficit -- the difference between expenditure and revenue -- was Rs 6.12 lakh crore during the April-November 2017-18 period, according to the data by the Controller General of Accounts (CGA). During the same period of 2016-17, the deficit stood at 85.8 per cent of that year's target.

For 2017-18, the government aims to bring down the fiscal deficit to 3.2 per cent of GDP. Last fiscal, It met the target of 3.5 per cent of GDP.

The CGA data showed that the government's revenue receipts were at Rs 8.04 lakh crore in the eight months to November, which work out to 53.1 per cent of the budget estimate (BE) of Rs 15.15 lakh crore for 2017-18. The receipts, comprising taxes and other items, were at 57.8 per cent of the target in the yearago period.

GST collections slipped to their lowest in November as rates were cut on dozens of goods to make the new national sales tax regime more acceptable. Total collections under the GST in November slipped for the second straight month to Rs 80,808 crore, down from over Rs 83,000 crore in the preceding month. The GST was implemented on July 1, 2017 to amalgamate the excise duty, the service tax, VAT and several other indirect taxes.

As per the data, the government's total expenditure was Rs 14.78 lakh crore at the end of November, or 68.9 per cent of the budget estimate. It was 65 per cent of the budget estimate a year ago. Capital expenditure during the April-November period of the 2017-18 fiscal was higher at 59.5 per cent of the BE compared to 57.7 per cent in the same period of the previous fiscal. Revenue expenditure, including interest payments, stood at 70.5 per cent of the BE during the AprilNovember period. That compares with 66.1 per cent a year ago. On Thursday, a member of the Prime Minister's Economic Advisory Council, Rathin Roy, said the central government will do its best to maintain the fiscal deficit target of 3.2 per cent of GDP. Roy’s statement tried to allay concerns that the union government will fail to achieve its fiscal deficit target, particularly after the regime decided to raise additional market borrowings, via dated government securities.

On Wednesday, the Finance Ministry announced that it will borrow Rs 50,000 crore through government securities, which analysts said could raise the fiscal deficit by 30 basis points to 3.5% of GDP for 2017-18. However, the Ministry, in a statement, said that the government will not be raising any net additional borrowing “between now and March 2018” as it wants to trim its shortterm borrowing programme.

The CGA, under the Department of Expenditure, under the Ministry of Finance, is the principal advisor on accounting matters. Finance Minister Arun Jaitley, in his previous budget speech, pegged the fiscal deficit for 2017-18 at 3.2% of GDP, and had said that the Narendra Modi government will remain committed to achieving three per cent in the 2018-19 financial year.

The regime’s decision to borrow Rs 50,000 crore from G-Secs could raise the fiscal deficit by 30 basis points to 3.5% of GDP for 2017-18 Massive borrowing