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The Centre’s fiscal deficit touched Rs 4.9 lakh crore by the end of December 2015, constituting 87.9 per cent of the budgeted Rs 5.5 lakh crore, official figures showed on Friday.
This meant that the government would need to limit its excess its expenditure over revenue by Rs 60,000 crore in the next three months. However, the target of the deficit is not only in absolute terms, but more importantly as 3.9 per cent of the country’s gross domestic product (GDP). With revision of GDP numbers on Friday and expected lower nominal growth than over 11 per cent assumed in the Budget for 2015-16, would require the government to limit the deficit by another Rs 29,000 crore, economists said.
The deficit had surpassed the Budget estimate by this time a year ago. The fiscal deficit was 87 per cent of the estimate till November.
The government’s capital expenditure rose 33.45 per cent to Rs 1.9 lakh crore till December from Rs 1.4 lakh crore in the corresponding period of 2014-15. Revenue expenditure was up three per cent to Rs 11.3 lakh crore from Rs 10.9 lakh crore a year ago. Of this, Rs 27,000 crore increase went to interest payments and non-interest revenue expenditure was up just Rs 3,000 crore because of lower fuel subsidies. Total receipts at Rs 8.2 lakh crore accounted for 67.6 per cent of the Rs 12.2 lakh crore Budget estimate. This was much higher than in the corresponding period of 2014-15 when receipts were 55.7 per cent of those budgeted.
Tax revenue swelled to Rs 6.2 lakh crore till December, 67.6 per cent of the Rs 9.2 lakh crore estimated. By December 2014 tax revenue accounted for 55.8 per cent of estimates. This is despite a likely shortfall of Rs 25,000-Rs 30,000 crore in direct taxes in 2014-15. Non-debt capital receipts were Rs 22,000 crore, 27 per cent of the budgeted Rs 80,000 crore for 2015-16. The government could not even start strategic sales, which were budgeted to generate Rs 28,500 crore. Disinvestment has so far not yielded half of the budgeted Rs 41,000 crore.
The government’s non-tax revenue was Rs 1.8 lakh crore, 90 per cent of the budgeted Rs 2.2 lakh crore, and higher than the 70 per cent of estimates during the first nine months of 2014-15.
The government has budgeted for a fiscal deficit of 3.9 per cent of the GDP in 2015-16. While economists say the deficit will be reined in at Rs 5.5 lakh crore as budgeted, it will be higher than 3.9 per cent of the GDP because the nominal economy did not grow as expected. Besides nominal GDP for 2014-15 was revised down to Rs 124.9 lakh crore in 2014-15 from Rs 125.4 lakh crore estimated earlier. “Factoring in the revised GDP for 2014-15 and a nominal GDP growth of 8.2 per cent instead of the 11.5 per cent assumed in the Budget for 2015-16, the Union Government’s fiscal deficit would need to be curtailed by nearly Rs 29,000 crore as compared to the Budget estimates, to meet the target of 3.9 per cent of GDP,” Icra chief economist Aditi Nayar said.
This meant that the government would need to limit its excess its expenditure over revenue by Rs 60,000 crore in the next three months. However, the target of the deficit is not only in absolute terms, but more importantly as 3.9 per cent of the country’s gross domestic product (GDP). With revision of GDP numbers on Friday and expected lower nominal growth than over 11 per cent assumed in the Budget for 2015-16, would require the government to limit the deficit by another Rs 29,000 crore, economists said.
The deficit had surpassed the Budget estimate by this time a year ago. The fiscal deficit was 87 per cent of the estimate till November.
The government’s capital expenditure rose 33.45 per cent to Rs 1.9 lakh crore till December from Rs 1.4 lakh crore in the corresponding period of 2014-15. Revenue expenditure was up three per cent to Rs 11.3 lakh crore from Rs 10.9 lakh crore a year ago. Of this, Rs 27,000 crore increase went to interest payments and non-interest revenue expenditure was up just Rs 3,000 crore because of lower fuel subsidies. Total receipts at Rs 8.2 lakh crore accounted for 67.6 per cent of the Rs 12.2 lakh crore Budget estimate. This was much higher than in the corresponding period of 2014-15 when receipts were 55.7 per cent of those budgeted.
Tax revenue swelled to Rs 6.2 lakh crore till December, 67.6 per cent of the Rs 9.2 lakh crore estimated. By December 2014 tax revenue accounted for 55.8 per cent of estimates. This is despite a likely shortfall of Rs 25,000-Rs 30,000 crore in direct taxes in 2014-15. Non-debt capital receipts were Rs 22,000 crore, 27 per cent of the budgeted Rs 80,000 crore for 2015-16. The government could not even start strategic sales, which were budgeted to generate Rs 28,500 crore. Disinvestment has so far not yielded half of the budgeted Rs 41,000 crore.
The government’s non-tax revenue was Rs 1.8 lakh crore, 90 per cent of the budgeted Rs 2.2 lakh crore, and higher than the 70 per cent of estimates during the first nine months of 2014-15.
The government has budgeted for a fiscal deficit of 3.9 per cent of the GDP in 2015-16. While economists say the deficit will be reined in at Rs 5.5 lakh crore as budgeted, it will be higher than 3.9 per cent of the GDP because the nominal economy did not grow as expected. Besides nominal GDP for 2014-15 was revised down to Rs 124.9 lakh crore in 2014-15 from Rs 125.4 lakh crore estimated earlier. “Factoring in the revised GDP for 2014-15 and a nominal GDP growth of 8.2 per cent instead of the 11.5 per cent assumed in the Budget for 2015-16, the Union Government’s fiscal deficit would need to be curtailed by nearly Rs 29,000 crore as compared to the Budget estimates, to meet the target of 3.9 per cent of GDP,” Icra chief economist Aditi Nayar said.
