New Delhi, Dec 31: The Centre’s cumulative fiscal deficit up to the month of November stood at 46.2% of the annual budget target for financial year 2021-22 as compared to 135% in the corresponding period last year, showed the data released by Controller General of Accounts (CGA).
As against the budget estimate of Rs. 15.06 lakh crores for whole of FY22, the cumulative fiscal deficit in the first eight months stood at Rs. 6.95 lakh crores.
The fiscal position of the government has markedly improved as revenue collections have been healthy. The capital expenditure during April-November period accounted for 49% of the budget estimate.
“In the first eight months of the fiscal year FY22, the revenue deficit was just 38.8% because of the robust 76% increase in revenue receipts and substantial holding back on revenue expenditure. The tax revenue collection has been robust and was 73.5% of the budget estimates,” said M Govinda Rao, Chief Economic Adviser at Brickwork Ratings.
Given the healthy fiscal trend, government has scope for further raising capital expenditure to boost demand in the economy which has been badly hit by the pandemic and another wave of Covid-19 looms large.
The government is estimated to get additional revenue over the budget estimate by Rs 1.7 lakh crores from higher tax revenue mop-up and dividends from the RBI.
Rao, however, said that given the additional burden of supplementary demand for grants, the chances of the government missing its fiscal deficit target cannot be ruled out.
