People walk past the North Block of Central Secretariat building which houses the Ministry of Finance and Ministry of Home Affairs, in New Delhi, India (Prashanth Vishwanathan/Bloomberg News)  

India’s Fiscal Deficit Climbs To 86.5% Of FY19 Target

India’s fiscal deficit continued to rise in July but remained lower than last year.

Fiscal deficit, the gap between the government’s revenue and expenditure, stood at Rs 5.40 lakh crore at the end of July compared with the targeted Rs 6.24 lakh crore, according to the data released by the Controller General of Accounts. That’s 86.5 percent of the budgeted estimate. The gap is lower than the 92.4 percent that it was in the same month last year.

The government’s total expenditure for April-July rose to Rs 8.89 lakh crore, or 36.4 percent of the full-year target. Revenue receipts stood at 19.5 percent of the target at Rs 3.35 lakh crore.

Tax revenue was at Rs 2.92 lakh crore, or 19.8 percent of the full-year target. Non-tax revenue hit 17.6 percent of the target at Rs 43,125 crore. Capital expenditure reached 37.1 percent of the FY19 target, compared to 30.8 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’s what its budgetary estimates are:

  • The 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 in FY19.