Home / News / India /  India’s April-July fiscal deficit at 3.2 trillion

NEW DELHI : Aided by a healthy rise in revenues, India’s fiscal deficit, or the gap between receipts and spending met through borrowing, stood at 3.2 trillion at the end of July, accounting for 21.3% of the full year target.

In the same period a year ago, the Centre’s fiscal deficit had scaled 8.2 trillion, exceeding the full year target.

Official data released by the Controller General of Accounts (CGA) on Tuesday showed that the Centre’s revenue deficit at the end of the April-July period stood at 2 trillion, or about 18% of the budget estimate. This was around 7.1 trillion, or 117% of budget estimate in the corresponding period a year ago.

In the first four months of the fiscal, the Centre’s gross tax revenue stood at 6.9 trillion ( 5.29 trillion net) aided by healthy income tax and goods and services tax (GST) collections. Businesses pay their first advance tax instalment in June based on their outlook for the whole year.

CGA data also showed that capital spending remained at 1.28 trillion in the first four months of this fiscal, compared with 1.11 trillion in the year ago period.

Experts pointed out that the Centre could meet the full year tax collection target but meeting disinvestment target was a challenge.

“With low receipts of 8,371 crore so far, it is likely that the disinvestment target of 1.75 trillion will be missed by a considerable margin, causing the government of India’s fiscal deficit to overshoot the FY22 budget estimate. Moreover, if other major fiscal stimulus measures are announced, and the outlay for vaccine procurement is raised above the budgeted 350 billion, it could cause the fiscal deficit to widen," said Aditi Nayar, chief economist at rating agency ICRA Ltd.

“At present, we estimate the government of India’s fiscal deficit for FY22 at 16 trillion or 7% of GDP, overshooting the budgeted amount of 15.1 trillion," said Nayar in a statement.

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