North Block in New Delhi, Which Houses the Finance Ministry. (Photographer: Prashanth Vishwanathan/Bloomberg)

India’s Fiscal Deficit Reaches 94.7% Of FY19 Target In August

India’s fiscal deficit rose further in August, inching closer to the government’s budgeted target for financial year 2018-19. However, it remained lower than what it was during the same month last year.

Fiscal deficit—the gap between the government’s revenue and expenditure—stood at Rs 5.91 lakh crore at the end of August, according to the data released by the Controller General of Accounts. The gap was 94.7 percent of the budgeted estimate of Rs 6.24 lakh crore for 2018-19. It stood at 96.1 percent in August last year.

The total expenditure for the April-August period rose to Rs 10.70 lakh crore, or 43.8 percent of the full-year target. Revenue receipts stood at 26.9 percent of the target at Rs 4.64 lakh crore.

Tax revenue was at Rs 3.66 lakh crore, or 24.7 percent of the full-year target. Non-tax revenue touched 40.1 percent of the target at Rs 98,332 crore. Capital expenditure reached 44.1 percent of the FY19 target, compared to 35.5 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:

  • 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 for the financial year 2018-19.