The Union government on Thursday reported fiscal deficit at around 46 per cent of the Budget Estimate for the April-November period. This is much lower than the over 135 per cent recorded during the corresponding period of last fiscal.

Fiscal deficit refers to expenditure outstripping revenue and is expressed as a percentage of nominal Gross Domestic Products (GDP). Fiscal deficit for April-November period is the lowest in 24 years as percentage of Budget Estimate. Experts are divided over the estimation of the fiscal deficit for the full year.

Devendra Kumar Pant, Chief Economist with India Ratings & Research (Ind-Ra), estimates the overall deficit to be 20 basis points (100 basis points = 1 per cent) lower than the Budget target of 6.8 per cent. However, Aditi Nayar, Chief Economist with ICRA, expects it to be in the range of ₹16.5-17-lakh crore against BE of over ₹15-lakh crore.

Meanwhile, data released by the Controller General of Accounts (CGA) showed that tax collections had hit 73.5 per cent of the BE in the eight-month period, while non-tax revenue had touched around 92 per cent. On the other hand, the total expenditure was capped at around 60 per cent of the BE, of which capital expenditure was over 49 per cent the BE and revenue expenditure 61.5 per cent.

Ind-Ra’s Pant said despite the excise duty cut on petrol and diesel in November, the gross tax revenue had risen 18.2 per cent y-o-y. In FY22 (April-November) gross tax revenue rose 50.3 per cent. “One of the major reasons for the low spending is the low subsidy; the outgo in April-November has been 68.54 per cent of the estimate with major savings in petroleum subsidies, where only 9.53 per cent of the budgeted amount was spent,” he said.

Core output

The eight core industries output for November grew a lower-than-expected 3.1 per cent, reflecting some slackening of momentum post the festival season. In October, it posted a robust 8.1 per cent growth.

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