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The Centre on Tuesday reported that its fiscal deficit exceeded more than half its Budget Estimate (BE) in the first two months of the current fiscal.
According to data made public by the Controller General of Account (CGA), deficit during April-May exceeded ₹4.66-lakh crore. This is 58.6 per cent of the ₹7.96-lakh crore estimated in the Budget. The deficit for the April-May period during 2019-20 and 2018-19 was 52 per cent and 55.3 per cent of the BE, respectively. One of the main reasons for higher deficit during two months is lesser revenue.
According to a Finance Ministry statement, the Centre received over ₹45,000 crore, which is little over 2 per cent of BE up to May. However, during this period, the total expenditure exceeded ₹5-lakh crore, which is nearly 17 per cent of the BE.
Experts feel that this fiscal revenue, not just from tax but also from non-tax means, will be hit. At the same time, the pandemic will necessitate more and more expenditure. This means deficit will be much more than estimated in the Budget.
First indication of the high deficit was seen in additional borrowing of ₹4.2-lakh crore during the current fiscal, taking the total borrowing to nearly 12-lakh crore. The Centre’s deficit could exceed 5 per cent as against 3.5 per cent of GDP estimated in the Budget.
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