India’s fiscal deficit crossed 77 per cent of the annual target for 2019-20 in July. Fiscal deficit till July stood at ₹5,47,605 crore, against a target of ₹7,03,760 crore for the full financial year 2019-2020.

Total expenditure till July stood at ₹9,47,278 crore against a fiscal target of ₹27,86,349 crore. Total receipts for the month stood at ₹3,99,673 crore against the fiscal target of ₹20,82,589 crore.

Commenting on the fiscal deficit situation, a CARE Ratings report said, “The fiscal deficit of the Government of India at ₹5.47 lakh crore in the first four months of 2019-2020 was 1.4 per cent higher than that in the comparable period a year ago.”

Aditi Nayar, Principal Economist at ICRA Ltd, said, “The mild rise in the fiscal deficit in April-July 2019, benefits from the unwelcome contraction in capital spending that took place in the pre-Budget months. Despite a near-doubling of capital outgo in July, post the presentation of the Union Budget, capital expenditure has recorded a contraction of 3.4 per cent in April-July 2019, whereas revenue spending has expanded by 7.9 per cent in these months.”

“Lower inflows of income/receipts at ₹3.9 lakh crore compared with the expenditure incurred by the government (both intractable expenditure commitments and capital expenditure- ₹9.4 lakh crore) have led to widening of the fiscal deficit...The higher transfers from the RBI this year will help support the fiscal numbers in case revenue does not increase in the expected manner,” CARE Ratings said.