India’s April-August fiscal deficit at 109.3% of full-year budget target

NEW DELHI: The union government on Wednesday reported a fiscal deficit of ₹8.70 trillion for April-August, which translates to 109.3% of its full-year target as tax collections remain under pressure due to the covid-19 pandemic.

Fiscal deficit was ₹7.96 trillion or 78.7% of the budgeted estimate in the year-ago period.

Data released by the Controller General of Accounts showed that revenue receipts were at ₹3.71 trillion or 18% of the budgeted target during April-August compared with 31% last year.

Total expenditure was ₹12.48 trillion or 41% of the budgeted estimate during the period under review.

The government has pegged fiscal deficit target, the difference between total revenue and expenditure, at 3.5% of Gross Domestic Product (GDP) for the financial year 2020-21. However, government finances have been under strain due to the pandemic and the ensuing two-month long, nationwide lockdown beginning March 23.

In May, the Centre had increased its gross borrowing programme for the current fiscal from the budgeted ₹7.8 trillion to ₹12 trillion, amid rising pressures on revenue and expenditure due to the covid-19 crisis.

“The central government finances for April-July FY21 highlights the lockdown led financial stress faced by the government with sharp decline in its income and an increase in expenditure which has consequently led to the significant widening of the fiscal deficit…Considering revision in various projections and the central government accounts released for 4 months during the fiscal FY21, we estimate fiscal deficit (as a % of GDP) to be 9% during the year,” CARE Ratings had said in a report on Monday.