Fiscal Deficit For April-February Below Revised Estimates

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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.

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