Fiscal deficit in eight months touches 87 percent, likely to overshoot target

The country's fiscal deficit has touched 87 percent of the budgeted amount, showing a worrying trend in government expenditure which is likely to overshoot what has been approved by parliament.

The total fiscal deficit till November-end for the 2015 was Rs. 4.84 lakh crore compared to the budgeted amount of Rs.5.55 lakh crore for the full year, with four months still to go, according to the details released by the Controller General of Accounts.

Total receipts for the eight months were Rs.6.58 lakh crore or 53.9 per cent of the full year budgeted figure of Rs.12.2 lakh crore compared to expenditure of Rs.11.4 lakh crore till November, putting pressure on government borrowings. The full year expenditure has been budgeted at Rs.17.77 lakh crore.

Fiscal deficit is the amount of money that the central government raises through borrowings to meet the gap between receipts and expenditure.

Of the financing through borrowings, the government has already reached 88 percent of the money that has been budgeted to be raised through domestic sources at Rs.4.80 lakh crore.

Roughly speaking, in eight months to November 2015, the fiscal deficit should have been around two-thirds of the budgeted amount. With it touching more than four-fifths of the benchmark, the chances of the fiscal deficit for the whole fiscal year overshooting its target of 3.9 per cent of the gross domestic product are very high. This should ring some alarm bells in the finance ministry.