Fiscal deficit for April-February, the eleven months of financial year 2018-19, touched 134.2 per cent of the revised estimate, mainly due to moderate revenue growth, data released by Controller General of Accounts showed Friday.
In absolute terms, fiscal deficit for April-February 2018-19 stood at Rs 8.51 lakh crore as against the revised estimate of Rs 6.34 lakh crore for the whole year, the data showed. Finance and Economic Affairs Secretary Subhash Chandra Garg said the fiscal deficit target of 3.4 per cent of the GDP stands as of now. “We stick to 3.4 per cent as of now,” Garg said. The government while presenting the Union Budget for 2019-20 on February 1 had revised up the fiscal deficit target to 3.4 per cent of the GDP from 3.3 per cent of the GDP.
The data released on Friday showed that revenue receipts of the Centre stood at Rs 12.65 lakh crore or 73.2 per cent of the revised estimate at the end of February as against Rs 11.77 lakh crore or 78.2 per cent of the estimates in the corresponding period last year. The government’s tax revenue stood at Rs 10.94 lakh crore during April-February in this financial year as against Rs 10.35 lakh crore in the year-ago period, while non-tax revenue was recorded at Rs 1.7 lakh crore as against Rs 1.42 lakh crore in the previous year.
Economists said slow pace of tax collection may put pressure on fiscal deficit, though a higher GDP number in Budget will help the Centre in inching closer to the fiscal deficit target. “FY19 (April-February) fiscal deficit at 134.2 per cent of revised estimate is originating mainly from receipt side. The revenue receipts in FY19 (April-February) were 73.2 per cent of revised estimates. Bharat ETF and PFC buying government’s stake in REC has resulted in government over achieving Rs 800 billion disinvestment target. Space available in capital expenditure in March 2019 (Rs 423.48 billion) and Rs 50 billon over achievement of disinvestment will provide some buffer. However, slow pace of tax collection would keep pressure on fiscal deficit. A higher GDP number than the one used in Budget will help government inching closer to FY19 fiscal deficit at 3.4 per cent of GDP,” Devendra Kumar Pant, chief economist, India Ratings and Research (Fitch Group) said.
Total expenditure incurred by the government during April-February 2018-19 was Rs 21.88 lakh crore (89.08 per cent of RE), of which Rs 19.15 lakh crore was on revenue account and Rs 2.73 lakh crore on capital account. Out of the total revenue expenditure, Rs 5.01 lakh crore was on account of interest payments and Rs 2.63 lakh crore on major subsidies. The finance ministry said that Rs 5.96 lakh crore has been transferred to states as devolution of share of taxes by the Central government up to February, which is Rs 67,043 crore higher than the corresponding period of last year 2017-18.