India’s Fiscal Deficit Reaches 95.3% Of FY19 Target In September
India’s fiscal deficit rose further in September, inching closer to the government’s budgeted target for financial year 2018-19.
Fiscal deficit—the gap between the government’s revenue and expenditure—stood at Rs 5.94 lakh crore at the end of September, according to the data released by the Controller General of Accounts. That's 95.3 percent of the budgeted estimate of Rs 6.24 lakh crore for 2018-19. The gap had stood at 91.3 percent in September last year.
The total expenditure for the April-September period rose to Rs 13.04 lakh crore, or 53.4 percent of the full-year target. Revenue receipts stood at 40.1 percent of the target at Rs 6.9 lakh crore.
“At a more disaggregated level some of the ministries that have spent higher during April-September in the current fiscal as compared to the last fiscal—to name a few are –drinking water and sanitation, heavy industries and public enterprises, labour and employment, power, labour, steel and road transport and highways,” said Sunil Kumar Sinha, principal economist at India Ratings, in an emailed note. “Similarly some of the ministries that have spent lower—to name a few are—consumer affairs, food and public distribution, north eastern region, food processing, housing and urban affairs.”
India Ratings believes there’s nothing alarming in this data as typically Centre’s expenditure is front-loaded in the first half of the fiscal and revenues (both tax and non-tax) mostly gets realised in the second half.Sunil Kumar Sinha, principal economist, India Ratings
Tax revenue was at Rs 5.8 lakh crore, or 39.4 percent of the full-year target. Non-tax revenue touched 44.5 percent of the target at Rs 1.08 lakh crore. Capital expenditure reached 54.2 percent of the 2018-19 target, compared with 54.6 percent in the same period last year.
Government’s Fiscal Plan
Budget documents showed that the government is expecting a 16.7 percent rise in its gross tax revenue in FY19. Here are its budgetary estimates:
- Gross tax revenue is expected to increase to Rs 22.7 lakh crore.
- As a percent of GDP, gross tax revenue is expected to be 12.1 percent.
- The net tax revenue for the Centre is pegged at Rs 14.8 lakh crore.
- Total expenditure for FY19 is pegged at Rs 24.4 lakh crore. That’s inclusive of the expenditure as a result of GST compensation to states.
- Capital expenditure is estimated to increase to Rs 3 lakh crore for the financial year 2018-19.