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Friday, August 6, 2021

Fiscal Deficit Reaches More Than 12 Lakh Crore In January End

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The fiscal deficit of the central government reached 66.8 percent at the end of January. It is Rs 12.34 lakh crore from the revised estimate of the current financial year at the end of January. The fiscal deficit at the end of January was 128.5 percent of the revised budget estimate a year earlier. According to figures released by the Comptroller and Auditor General (CGA), the government’s fiscal deficit at the end of January 2021 reached Rs 12,34,004 crore at the end of January 2021.

The estimated government’s fiscal deficit during the current financial year till March 31 was at Rs 18.48 lakh crore, or 9.5 per cent of gross domestic product (GDP). It is noteworthy that during the current financial year, a lockdown was imposed to control the spread of corona virus pandemic which had a major impact on business activities. Because of this the government’s revenue receipts were also low.

According to the CGA, by January 2021, the government had a revenue of Rs 12.83 lakh crore. This amount is 80 percent of the revised budget estimate for 2020-21. This includes tax revenue of Rs 11.01 lakh crore. At the same time, tax receipts stood at 82 percent of the budget estimate for 2020-21. This was 66.3 per cent in the same period last year. Non-tax revenue was 67 percent above the revised estimate. It was 73 per cent in the same period a year ago.

According to the CGA, the total expenditure during the reporting period was 25.17 per cent, which is 73 per cent of the revised estimate. At the same time, total expenditure during this year was 84.1 per cent of the revised estimate. The estimate of fiscal deficit in the February 2020 budget was Rs 7.96 lakh crore, or 3.5 per cent of GDP. But, in the revised estimate, it has reduced to 9.5 per cent (Rs 18 lakh 48 thousand 655 crore).

It is noteworthy that economic activities remained closed due to COVID-19 pandemic and lockdown. However to overcome the pandemic, the expenditure on medical facilities and treatment of the sick has increased rapidly. The fiscal deficit had reached 4.6 per cent in 2019-20, the highest deficit in the last seven years.

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