Fiscal deficit touches 121.5% of full-year target at Rs 7.70 trn in Jan

Fiscal deficit touched 121.5 per cent of the full-year revised target of Rs 6.34 lakh crore at the end of January on account of lower revenue collections, government data showed on Tuesday.
The fiscal deficit, or the gap between the government's expenditure and revenue, stood at Rs 7.70 lakh crore during April-January of the current financial year ending March.

At the end of January 2018, the deficit was 113.7 per cent of the Revised Estimate (RE).
The government had budgeted to cut the fiscal deficit to 3.3 per cent of GDP or Rs 6.24 lakh crore in 2018-19, from 3.53 per cent in the previous financial year. However, in the Interim Budget 2019-20, the fiscal deficit was revised upwards marginally to 3.4 per cent of GDP or over Rs 6.34 lakh crore, on account of additional outlay of Rs 20,000 crore for funding income scheme for small farmers.
According to the data released by the Controller General of Accounts (CGA), the revenue receipts of the government totalled Rs 11.81 lakh crore or 68.3 per cent of RE till January in 2018-19, compared with 72.8 per cent during the same period last fiscal.
According to RE, the government expects to mop up Rs 17.29 lakh crore revenue during the current fiscal, from Rs 17.25 lakh crore budgeted originally.
Tax revenue was 68.7 per cent of RE, compared with 76.5 per cent in the comparable period of the previous year.
According to the CGA data, the total expenditure of the government at January-end was Rs 20.01 lakh crore or 81.5 per cent of RE. The total expenditure for the current fiscal has been raised to Rs 24.57 lakh crore in the RE, from the budgeted Rs 24.42 lakh crore.

Fiscal deficit hits 112.4% of FY19 target at Rs 7.01 trn in Apr-Dec

Fiscal deficit touched 112.4 per cent of the full-year budget target of Rs 6.24 trillion at the end of December on account of lower revenue collections, government data showed on Monday.
The fiscal deficit, or gap between Government's expenditure and revenue, stood at Rs 7.01 trillion during April-December of the current financial year which ends in March.

At the end of December 2017, the deficit was 113.6 per cent of the Budget Estimate (BE).
The government has budgeted to cut the fiscal deficit to 3.3 per cent of GDP or Rs 6.24 trillion in 2018-19, from 3.53 per cent in the previous financial year.
In the interim budget for 2019-20, the fiscal deficit was revised upwards marginally to 3.4 per cent of GDP or over Rs 6.34 trillion, on account of an additional outlay of Rs 20,000 crore for funding income scheme for small farmers.
According to the data released by the Controller General of Accounts (CGA), the revenue receipts of the government totalled Rs 10.84 trillion or 62.8 per cent of BE in 2018-19 till December, compared with 66.9 per cent during the same period last year.
The government has budgeted to mop up Rs 17.25 trillion revenue during the current fiscal. The figure has been revised upwards to over Rs 17.29 trillion in the 2019-20 interim budget.
Tax revenue was 63.2 per cent of BE, compared with 73.4 per cent in the comparable period of the previous year.
According to the CGA data, the total expenditure of the government at December-end was Rs 18.32 trillion or 75 per cent of BE.
The total expenditure for current fiscal has been raised to Rs 24.57 trillion in the Revised Estimates, from the budgeted Rs 24.42 trillion.

Fiscal deficit hits 55% of full-year target on the back of higher capex

The Centre’s fiscal deficit for the first two months of fiscal year 2018-19 stood at Rs 3.45 trillion, or 55 per cent of the full year target, on the back of higher capital expenditure.
However, the pace of spending in relative terms was slower than the same period last fiscal.

Fiscal deficit for April-May 2017 touched 68.3 per cent of the full year target.
The fiscal deficit target for 2018-19 is Rs 6.24 trillion, or 3.3 per cent of the gross domestic product (GDP).
“Fiscal deficit for April-May 2018 recorded a welcome year-on-year decline on the back of robust growth in indirect tax and non tax revenues as well as near stagnant revenue spending, allowing for a healthy rise in capital expenditure in the early part of the year,” said Aditi Nayar, principal economist at ICRA.
Net tax revenues for April-May 2018 was Rs 1.02 trillion, or 6.9 per cent of the full year target, compared with 5.5 per cent for the first two months of 2017-18. Non-tax revenue was Rs 240 billion, or 9.8 per cent of the full year target against 5.3 per cent for the same period last year. Total receipt was Rs 1.27 trillion, which is 7 per cent of the target compared to 5.4 per cent in the previous year.
ALSO READ: April-May fiscal deficit reaches 55.3% of budgeted target of FY19
graph Total expenditure till May 31 was Rs 4.73 trillion, or 19.4 per cent of the full year target compared to 21.4 per cent last year. Revenue expenditure was Rs 4.09 trillion, or 19 per cent compared to 21 per cent last year. Capital expenditure was Rs 638 billion, which is 21.3 per cent of the full year target compared with 17 per cent for the same period last year.
As Business Standard reported earlier, the Centre had to pay less amounts in food and fertiliser subsidy carryovers this year compared to last.
“In contrast to the stagnation in revenue expenditure, capital spending recorded a substantial 21 per cent growth in the first two months of this fiscal, led by sectors such as defence, roads, railways and transfers to states,” Nayar said.

Govt to raise Rs 50,000 cr via G-secs; fiscal deficit target to be breached

The central government is set to borrow Rs 50,000 crore extra through long-term securities from the markets, over and above the budget estimate of Rs 5.80 lakh crore for fiscal year 2017-18. This means it will now breach its fiscal deficit target for the year of 3.2 per cent of gross domestic product. All other things being equal, fiscal deficit for the year could be 3.5 per cent of GDP.

A top government official confirmed that the Centre was set to borrow more, in the light of lower than expected revenue proceeds from the goods and service tax (GST) and non-tax revenue items like dividends from state-owned companies. An official statement from the finance ministry later confirmed that Rs 50,000 crore worth of additional government securities (G-Secs) would be issued in the January-March quarter.

Additionally, the issuance of short-term borrowings (Treasury Bills) would be reduced by about Rs 61,000 crore.

Any slippage this year means that the expected target for the next year, of 3 per cent of GDP, will not be adhered to, either. Finance Minister Arun Jaitley could use that extra spending room in what will be the Narendra Modi government’s last full Budget before the 2019 general elections.

Economic Affairs Secretary Subhash Garg had said in September that the Centre would re-assess its borrowing and fiscal targets in December. As of end-October, fiscal deficit was already at 96.1 per cent of the full-year target. For April-September fiscal deficit was at 6.3 per cent of GDP. The finance ministry has reined in spending over the past few months and will continue to do so after massive front-loading in the first half of the year due to advancing of the Budget.

On the revenue side, there are several concerns. There could be a tax revenue shortfall of Rs 20,000 crore due to a revision in GST rates, Bihar Deputy Chief Minister Sushil Modi said in the last GST Council meeting in Guwahati. However, central government officials maintain that was Sushil Modi’s views and any shortfall could be offset by greater compliance and an increase in demand. They say a clarity on the matter would emerge later.

Also, on the direct taxes front, as reported by Business Standard, the Central Board of Direct Taxes (CBDT) has pitched for lowering of direct tax targets by Rs 20,000 crore from the budget estimates due to a slowdown in economic growth.

Also, the Reserve Bank of India (RBI) has this year paid the Centre a surplus of Rs 30,600 crore. The Centre said it was expecting around Rs 43,000 crore. There is no certainty that the RBI would pay an extra amount or not. There is also a concern that state-run companies, having been told to spend more in capital expenditure, as well as buy back shares, might not be able to cough up the dividend expected of them.

The only silver lining, meanwhile, seems to be disinvestment, which could garner proceeds of above Rs 90,000 crore, compared with the budget estimate of Rs 72,500 crore.