The Centre’s financial situation improved marginally, but remained precarious in the first six months of the fiscal as its spending outpaced its receipts by a wide margin.
The Centre’s fiscal deficit rose to ₹4,98,938 crore or 91.3 per cent of the Budget target between April and September 2017.
This is a marginal improvement from the August data when fiscal deficit touched 96.1 per cent of the full-year target, but it remains high compared to April-September 2016 when it was at 83.9 per cent of the Budget Estimate.
The revenue deficit was also contained, but remained in higher than the Budget target at 118 per cent or ₹3,79,591 crore between April and September this fiscal.
It was at 133.9 per cent of the target between April and August this fiscal, although it was much lower at 91.9 per cent in the first six months of 2016-17.
With focus on spending from the start of the fiscal, the Centre’s total expenditure amounted to ₹11,49,187 crore or 53.5 per cent of the Budget target in the first six months of this fiscal. Of this, revenue expenditure was ₹10,02,798 crore or 54.6 per cent of the Budget Estimate while capital expenditure was ₹1,46,389 crore or 47.3 per cent of the full-year target.
Meanwhile, total receipts were just ₹6,50,249 crore or 40.6 per cent of the Budget Estimate between April and September 2017.
Robust revenues Tax revenue was robust and better than last fiscal, amounting to 44.2 per cent of the Budget Estimate or ₹5,42,358 crore.
However, non-tax revenue, which consists of interest receipts and dividends and profits, was ₹80,849 crore or just 28 per cent of the full-year target.
The pressure on tax collections could increase in the coming months as the Centre had cut the excise duty on petrol and diesel by ₹2 per litre on October 3, that would mean a revenue loss of ₹13,000 crore for the next six months.
The Centre has targeted to lower its fiscal deficit to 3.2 per cent of the GDP in 2017-18 but senior government officials have indicated that it could be reviewed later in the year.\