The central government’s fiscal deficit in the first eleven months of FY21 ran below the revised estimate of 9.5% of the GDP presented at the time of the Union Budget, shows data released by the Controller General Of Accounts.
While the fiscal deficit for April-February suggests the government may manage to end the year with a lower deficit than projected, subsidy arrears paid out in the final month may bring the budget gap closer to the revised estimates.
April-February fiscal deficit was 76% of revised estimates. In actual terms, the deficit stood at Rs 14.05 lakh crore compared with the revised estimate of Rs 18.48 lakh crore.
April- February revenue deficit was at 71.6% or revised estimates or Rs 10.43 lakh crore. The budget has pegged it at a revised Rs 14.56 lakh crore.
“We anticipate the Government of India’s fiscal deficit to trail the FY21 revised estimate by around Rs 1.3-1.5 lakh crore, based on our expectation of a modest upside to the tax revenues, and undershooting of its non-interest non-subsidy revenue expenditure. Accordingly, we forecast the fiscal deficit in FY21 at Rs 17.0-17.2 lakh crore,” said Aditi Nayar, principal economist at ICRA Ltd.
Tax Revenue Growth Slows
The fine print of the February accounts suggests that tax revenue growth slowed.
For the month of February, gross tax revenue grew 2.2% year-on-year. This was lower than the 19.65% rise seen in January.
Cumulatively, between April-February, gross tax revenues are now just 0.7% below the collections seen in the same period in the previous fiscal.
In comparison to budget estimates, tax receipts are at 90% of the revised estimates while total revenue receipts are at 88% of revised estimates.