April-June fiscal deficit hits 82% of FY target

Revenue deficit exceeds target

The Centre’s fiscal deficit for the April-June quarter was Rs 4.42 lakh crore, or 81.8 per cent of the full-year target of Rs 5.46 lakh crore. This compares with 61.1 per cent for the year-ago period.

The jump in fiscal deficit is primarily a result of massive front-loading of expenditure due to the advancement of the Budget from March 28 to February 1.

Additionally, revenue deficit for April-June 2017-18 was Rs 3.83 lakh crore, about 119 per cent of the full year target of Rs 3.22 lakh crore, and compared with 79.6 per cent for the corresponding period last year, according to official data released on Monday. This shows that the Centre’s revenue expenditure grew at a faster click than capital spending.

Aditi Nayar, principal economist, ICRA , said: “The sharp year-on-year rise in the Centre’s fiscal and revenue deficits is not a source of alarm, with the up-fronting of the Budget presentation and expenditure pattern, making the data incomparable.” In particular, the robust 40 per cent year-on-year expansion in the government’s capital expenditure in Q1 FY2018 is encouraging.

For the April-June, tax revenue was Rs 1.77 lakh crore or 14.5 per cent of the full-year estimate. Total receipts, including from revenue and non-debt capital receipts, was Rs 2.09 lakh crore or 13.1 per cent of the full-year target.

Total expenditure during April-June was Rs 6.51 lakh crore or 30.3 per cent of the budgeted estimates. Capital expenditure was Rs 68,328 crore or 22 per cent of the full-year target, while revenue spending was Rs 5.82 lakh crore or 31.7 per cent of the full-year target. “More than half of the Budget estimates for major subsidies have been already released in the first quarter, contributing to the high growth of revenue expenditure in that quarter. 
 

Together, the incremental subsidy and interest payment outgo accounted for nearly half of the rise in revenue expenditure in absolute terms,” Nayar said.
 

As a percentage of gross domestic product, the Centre aims to limit fiscal deficit to 3.2 per cent of gross domestic product, compared with 3.5 per cent for 2016-17.