Slower-than-projected growth in revenue, especially tax and disinvestment receipts, resulted in the Centre’s fiscal deficit in the first six months of this fiscal to be about Rs 5.95 lakh crore, or 95.3 per cent of the full-year target, according to data released by the Controller General of Accounts on Thursday. In the corresponding period last year, the deficit was 91.3 per cent of the relevant annual target and the government finally had to allow a 33 basis points slippage from the targeted deficit of 3.2 per cent of GDP for FY18.
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.
While it is widely believed that the Centre may have to apply brakes on the spending pace in the later part of the year to keep the promise of sticking to the FY19 fiscal deficit target of 3.3 per cent of the GDP, capital spending in the first half was rather robust at Rs 1.63 lakh crore, 54 per cent of the annual target and up 11 per cent over the year-ago period.
Subsidies in H1FY19 were reined in at the same level in absolute terms as the year-ago period at Rs 1.88 lakh crore. Revenue deficit in H1FY19 was 108 per cent of the annual target at Rs 4.5 lakh crore. —FE