Amidst concerns over the Centre’s high fiscal deficit, the Finance Ministry on Wednesday said that it expects “higher resource mobilisation” with improvement in macro-economic parameters and streamlining of the Goods and Services Tax (GST) regime.
“Measures initiated by government for expenditure management and fiscal prudence are also underway and incremental benefits may accrue in later part of the financial year,” it said in the Statement on quarterly review of the trends in receipts and expenditure in relation to the Budget at the end of the first quarter of the financial year.
Noting that the fiscal deficit as a percentage of the Budget Estimate was higher at the end of the first quarter of 2017-18, the Finance Ministry further said that this may be seen mainly in the context of the faster pace of expenditure.
The Centre’s fiscal deficit touched ₹4,41,685 crore or 80.8 per cent of the full year target between April and June 30 this fiscal as against ₹3,26,323 8 or 61.1 per cent of the BE a year ago.
But, with tax revenue lagging behind expenditure pattern, the fiscal deficit has risen further to ₹5,25,321 crore or 96.1 per cent of the BE by the end of October, as receipts lagged behind expenditure. It was marginally lower at 79.3 per cent of the Budget Estimate a year ago.
However, the Ministry said that the government’s fiscal policy and the Budget 2017-18 were guided by the twin macro-economic need of reviving growth momentum while being committed to fiscal consolidation.
“The government’s firm commitment for growth revival by increasing public investment and reviving public demand is visible in the substantial increase in expenditure over the corresponding period a year ago,” it noted.
The increased pace of expenditure may also be seen in the context of the advancement of Budget cycle, it further said.
Remaining optimistic about the revenue collections, it said that despite the subdued GDP growth of 5.7 per cent in the first quarter, gross tax collections grew by 15.2 per cent in the period, which was higher than the budgeted growth rate of about 11 per cent.