Fiscal deficit breaches FY18 target at November end

India’s fiscal deficit at the end of November breached the target and touched 112 per cent of the budget estimate for 2017-18 mainly due to lower GST collections and higher expenditure.

In absolute terms, the fiscal deficit—the difference between expenditure and revenue—was Rs 6.12 lakh crore during April-November 2017-18, according to the data by the Controller General of Accounts (CGA).

During the same period of 2016-17, the deficit stood at 85.8 per cent of that year’s target.

For 2017-18, the government aims to bring down the fiscal deficit to 3.2 per cent of GDP. Last fiscal, it had met the target of 3.5 per cent of GDP.

The CGA data showed that the government’s revenue receipts were at Rs 8.04 lakh crore in the eight months to November, which work out to 53.1 per cent of the budget estimate (BE) of Rs 15.15 lakh crore for 2017-18.

The receipts, comprising taxes and other items, were at 57.8 per cent of the target in the year-ago period.

The Goods and Services Tax (GST) collections slipped to their lowest in November as rates were cut on dozens of goods to make the new national sales tax regime more acceptable.

Total collections under the GST in November slipped for the second straight month to Rs 80,808 crore, down from over Rs 83,000 crore in the previous month.

The GST was implemented from July 1, 2017 to amalgamate the excise duty, service tax, VAT and several other indirect taxes.

As per the data, the government’s total expenditure was Rs 14.78 lakh crore at November-end, or 68.9 per cent of the budget estimate. It was 65 per cent of the budget estimate a year ago.

Capital expenditure during April-November of 2017-18 was higher at 59.5 per cent of the BE compared to 57.7 per cent in the same period of the previous fiscal.

Revenue expenditure, including interest payment, was 70.5 per cent of the BE during April-November 2017-18. This compares with 66.1 per cent a year earlier.