The government plans to reduce fiscal deficit to 3.3 per cent of Gross Domestic Product by March-end 2019. The fiscal deficit, or gap between expenditure and revenue, stood at Rs 7.16 lakh crore during April-November of the current financial year.
Net tax receipts (post refunds and devolution to states) grew just 7.5 per cent in H1FY19 against the year-ago period. A y-o-y growth of 19 per cent is required to raise the budgeted amount of Rs 14.8 lakh crore from taxes for the full year.
The fiscal position of states deteriorated in 2017-18 over 2016-17 as revenue deficit for most states widened whereas states with revenue surplus witnessed a decline in their surplus, according to a Care Ratings report.
While adherence to the fiscal deficit target will be known after the data for March comes in, analysts said the high absolute number till February will erase some of the recent gains recorded in the bond market.
Budget 2018: The slippage in this year’s fiscal deficit target was despite the government has exceeded the disinvestment target for the current fiscal, with receipts of around Rs 1,00,000 crore against the targeted Rs 72,000 crore.