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The Central government’s fiscal deficit has exceeded the Budget estimate for the full financial year in the first nine months (April-December) of the current fiscal year. The fiscal deficit is the difference between the government’s income and expenditure.
Data released by the Controller General of Accounts show that the deficit during the April-December period was over ₹5.32-lakh crore as against the Budget estimate of ₹5.31-lakh crore. This is 100.2 per cent of the estimate as against 95.2 per cent during the corresponding period of the previous fiscal year.
The Government has repeatedly said that it will be able to contain the deficit within the Budget target of 4.1 per cent of GDP.
Experts feel that with the change in calculation of Gross Domestic Product (GDP), the deficit number as a percentage of GDP will be lower than the Budget projection.
Aditi Nayar, Senior Economist with ICRA, said that tax revenue is expected to see a shortfall of ₹80,000 crore. While the stake sale in Coal India is encouraging, if the full-year target for disinvestment is missed, the impact of the anticipated shortfall in tax revenue will be exacerbated.
“The contraction in capital spending in the first nine months of fiscal year 2015, as compared to the same months of 2014, raises concerns regarding the quality of the fiscal outcome, even if the fiscal deficit is eventually restricted to the target of ₹5.3 trillion,” Nayar said.
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