Fiscal Deficit Remains Above Annual Target for Second Month in a Row
The Union Government's fiscal deficit remained above the annual target for second month in row at the end of August, mainly on account of the impact of lockdown on revenue collections. According to the data released by the Controller General of Accounts (CGA), fiscal deficit during April-August was at 109.3 per cent of the annual target estimated in the Budget.
In absolute terms, the fiscal deficit was at Rs 8,70,347 crore. It stood at 78.7 per cent of Budget Estimates (BE) in the corresponding period during the last fiscal. Fiscal deficit or the gap between the expenditure and revenue had breached the annual target in July.
The government had pegged fiscal deficit for 2020-21 at Rs 7.96 lakh crore or 3.5 per cent of GDP in the Budget presented by Finance Minister Nirmala Sitharaman in February. These figures, however, may have to be revised significantly in view of the economic disruptions created by the outbreak of coronavirus pandemic.
Fiscal deficit had soared to a seven-year high of 4.6 per cent of the Gross Domestic Product (GDP) in 2019-20, mainly on account of poor revenue realisation, which dipped further towards the end of March because of a nationwide lockdown to contain the spread of coronavirus. As per CGA data, the government's revenue receipts stood at Rs 3,70,642 crore or 18.3 per cent of BE in April-August. During the same period of the last fiscal, it was at 30.7 per cent of BE.
Tax revenue stood at Rs 2,84,495 crore or 17.4 per cent of BE during the first five months of the fiscal. During the corresponding period of the last fiscal, it was at 24.5 per cent of BE. Total receipts of the government stood at 16.8 per cent of BE or Rs 3,77,306 crore. In the Budget, the government had estimated the total receipts for the fiscal at Rs 22.45 lakh crore.
The government's total expenditure stood at Rs 12,47,653 crore or 41 per cent of BE at end-August. During the same period of the last fiscal, total expenditure was at 42.2 per cent of BE.