The Centre’s fiscal deficit in April-October of 2019-20 came in at Rs 7.20 lakh crore, or 102.4 per cent of the Budget Estimate, for the whole of the fiscal year, according to the data released by the Controller General of Accounts (CGA) on Friday. In the corresponding period last year, the deficit was 103.9 per cent of the Budget Estimate for the whole fiscal.
Additional transfer of Rs 58,000 crore extra receipts from the Reserve Bank of India, following the reformulation of its economic capital framework, helped the government’s financial position, even though tax revenue growth slackened. Finance Ministry sources said that the government is sticking to the fiscal deficit glide path of containing it at 3.3 of GDP by March-end 2020.
The government has estimated the fiscal deficit for the current fiscal at Rs 7.03 lakh crore, aiming to restrict the deficit at 3.3 per cent of the gross domestic product (GDP). The year-on-year (y-o-y) growth in the Centre’s total budgetary expenditure rose from (-)11 per cent in June to 34 per cent in September, but slowed again to 9 per cent in October. Total expenditure during April-October this year stood at Rs 16.54 lakh crore, or 59.4 per cent of the Budget Estimate. The government has pegged its total expenditure for 2019-20 at Rs 27.86 lakh crore.
However, the quality of spending has improved in recent months. Budgetary capex grew by 13.6 per cent y-o-y in April-October quarter this fiscal, a bit lower than the 15.3 per cent seen in the first six months of the year. Budgetary capex jumped 65 per cent in Q2, against a contraction of 28 per cent in Q1. Capital expenditure stood at 59.5 per cent of the budget estimates during April-October period, as compared to 59 per cent in the year-ago period.
The CGA data showed that the government’s revenue receipts during the April-October period of 2019-20 rose to 46.2 per cent of the Budget Estimate as compared to 45.7 per cent in the corresponding period last year. In absolute terms, revenue receipts stood at Rs 9.07 lakh crore at the end of October. For the entire FY20, revenue receipts have been pegged at Rs 19.62 lakh crore.
The fiscal deficit figure in monthly accounts during a financial year is not necessarily an indicator of fiscal deficit for the year, CGA said. Its data gets impacted by temporal mismatch between flow of non-debt receipts and expenditure up to that month on account of various transitional factors both on receipt and expenditure side, which may get substantially offset by the end of the financial year, it said.