India’s budgetary fiscal deficit reached 98.5 per cent of revised 2020-21 target or 9.3 per cent of the GDP, official data showed on Monday.
The 2020-21 deficit — the difference between revenue and expenditure — had been enhanced to Rs 18.48 lakh crore, or around 9.5 per cent of the GDP, as compared to the earlier target of Rs 7.96 lakh crore for the last fiscal.
As per Controller General of Accounts (CGA) data, the fiscal deficit for the 2020-21 period stood at over Rs 18.21 lakh crore, or 98.5 per cent of the revised estimates (RE).
The deficit during the corresponding months of the previous fiscal was 121.8 per cent of that year’s target.
Segment-wise, the Central government’s total expenditure stood at Rs 35.11 lakh crore (101.8 per cent of RE) while total receipts were Rs 16.89 lakh crore (105.5 per cent of RE).
“Rs 5,94,997 crore has been transferred to state governments as devolution of share of taxes by the Government of India upto this period which is Rs 55,680 crore lower than the previous year,” the Finance Ministry said in a statement.
On a sequential basis, India’s budgetary fiscal deficit for April 2021-22 period stood at Rs 78,699 crore, or 5.2 per cent of the budget estimates (BE). The FY22 deficit has been pegged at Rs 15.06 lakh crore.
Besides, the CGA data showed that fiscal deficit during the corresponding months of the previous fiscal was 35.1 per cent of that year’s target.
The Central government’s total expenditure stood at Rs 2.26 lakh crore (6.5 per cent of BE) while total receipts were Rs 1.47 lakh crore (7.5 per cent of BE).
“Fiscal deficit in FY21 (prov) came in at INR18.21 trillion. This was mainly due to 5.9 per cent higher net tax revenue collection and 23.9 per cent higher collections of non-debt capital receipts. Revenue expenditure was 2.5 per cent higher than FY21 (RE), however, capital expenditure was 3.1 per cent less than FY21 (RE). Capital expenditure in FY21 (prov) was 3.1 per cent higher than the FY21 (BE),” India Ratings & Research’s Chief Economist Devendra Kumar Pant said.
“FY21 fiscal deficit as per FY21 GDP used in the FY22 Union Budget is estimated as 9.3 per cent of GDP. Although the government announced a stimulus package of more than 10 per cent of GDP in FY21, actual stimulus in FY21 budget has been INR4.69 trillion, 2.4 per cent of GDP. Higher expenditure contributed 45.7 per cent to fiscal deficit slippage followed by lower revenue receipts and capital receipts.”
ICRA’s Chief Economist Aditi Nayar said: “The fiscal outcomes for April 2021 vary considerably from April 2020 when the nationwide lockdown was in place. Firstly, the gross tax revenues in April 2021, a portion of which pertain to economic activity that took place in March 2021, were healthy, displaying an expansion of 152 per cent over April 2020.”
“The capital expenditure recorded a healthy level of Rs 471 billion and a robust 66 per cent YoY growth, given the low base related to the lockdown that had curtailed activity in April 2020. However, revenue expenditure contracted by a steep 35 per cent on a YoY basis in April 2021, and was also well below the April 2019 level.”