Fiscal deficit for FY16 was 4.31 per cent: CAG

The CAG has estimated the Centre’s fiscal deficit in FY16 to be Rs 53,146 crore higher than estimated in the Budget, marking one of the widest divergence between the two estimates ever. According to India’s top auditor, fiscal deficit stood at 4.31 per cent of the GDP in FY16 versus the provisional actuals of 3.9 per cent, reported by the government.

The Centre’s financials, as reported by the Controller General of Accounts and audited by the CAG, varied widely in the last decade and the gap peaked at Rs 97,452 crore in FY09 (post-UPA-I election year that saw Rs 66,000 crore mega farm loan waiver). Going by the CAG estimate, the Centre missed the fiscal deficit target in FY16.

Although difference has since narrowed and become negligible in FY14, it is again looking up.

“Some of the possible reasons for this divergence is the lack of transparency in disclosure of receipts and expenditures. Another aspect of opaqueness is high degree of aggregation. This aspect has been brought forth by the 12th Finance Commission which has specified eight set of separate statements along with the budget,” SBI economists said in a report.