Fiscal deficit limited to 21.3% till now

Data showed that the revenue deficit at the end of the period stood at ₹2 lakh crore

NEW DELHI: Aided by a healthy growth in revenues, India’s fiscal deficit or gap between receipts and spending met through borrowing stood at a modest ₹3.2 lakh crore at the end of July, accounting for 21.3% of the full-year target

In the corresponding period last year, the fiscal deficit had scaled ₹8.2 lakh crore, exceeding the target. Official data released by the Controller General of Accounts (CGA) on Tuesday showed that the Centre’s revenue deficit at the end of the period stood at ₹2 lakh crore or about 18% of the budget estimate. This was around ₹7.1 lakh crore or 117% in the same time a year ago.

In the first four months of this fiscal, Centre’s gross tax revenue stood at ₹6.9 lakh crore, aided by healthy income tax and goods and services tax (GST) collections.

CGA data also showed that capital spending remained at ₹1.28 lakh crore in the first four months of this fiscal, compared to ₹1.11 lakh crore in the year ago period.

Experts pointed out that the government could meet the full year tax collection target but meeting disinvestment target was a challenge.

“With low receipts of ₹8,371 crore so far, it is likely that the disinvestment target of ₹1.75 lakh crore will be missed by a considerable margin, causing the government of India’s fiscal deficit to overshoot the FY22 budget estimate,” said Aditi Nayar, chief economist, Icra.

India’s equity markets extended gains for the seventh straight session with the benchmark 30-share Sensex index surpassing the 57,000 mark while the 50-share Nifty index touched 17,000 for the first time on Tuesday.

At closing, the Sensex rose 1.16% to a fresh record high of 57,552.39 points while Nifty hit a new high of 17,132.20 points, up 1.19%. Both indices took 19 trading sessions for the latest 1,000 points rally.

Both Sensex and Nifty rose for the fourth straight month climbing 9.5% and 8.7%, respectively in August, the best monthly gains for the indices since November 2020.

The deficit figures 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.