The central government’s fiscal deficit soared to Rs 12.34 trillion, or 66.8 per cent, of the Revised Budget Estimates at the end of January of the current fiscal year, according to the data released by the Controller General of Accounts (CGA).
The fiscal deficit at the end of January in the previous financial year was 128.5 per cent of the Revised Estimates (RE). In the current fiscal ending March 31, the fiscal deficit is likely to touch Rs 18.48 trillion, or 9.5 per cent, of the gross domestic product (GDP). The lockdown imposed to curb the spread of coronavirus infections had significantly impacted business activities and in turn, contributed to sluggish revenue realisation.
The fiscal deficit, or gap between the expenditure and revenue, had breached the annual target in the month of July during this financial year. The government received Rs 12.83 trillion — 80 per cent of the RE 2020-21 — up to January, 2021. This included Rs 11.01 trillion of tax revenue.
The tax revenue collection was 82 per cent of the RE of 2020-21, as compared to 66.3 per cent of the RE (2019-20) during the same period last fiscal. Non-tax revenue was 67 per cent of the RE. During the corresponding period of the last fiscal, it was 73 per cent.
According to the CGA data, total expenditure incurred stood at Rs 25.17 trillion, or 73 per cent of the RE in the current fiscal year.
Last fiscal, it was 84.1 per cent of the RE during the same period.
For this financial year, the government had initially pegged the fiscal deficit at Rs 7.96 trillion, or 3.5 per cent of the GDP, in the Budget presented in February 2020.
However, according to Eevised Estimates in Budget 2021-22, the fiscal deficit in the year ending March is estimated to soar up to 9.5 per cent of the GDP, or Rs 1,848,655 crore. This will be because of rise in expenditure on account of the outbreak of Covid-19 and moderation in revenue.
Fiscal deficit had soared to a seven-year high of 4.6 per cent of the GDP in 2019-20, mainly because of poor revenue realisation.