India Fiscal Deficit Stands At 9.3% Of GDP in FY21

The fiscal deficit stood at 9.3 per cent of the Gross Domestic Product (GDP) in the last fiscal, better than 9.5 per cent projected in the revised estimates in the Union Budget in February. Economic activities were severely hit in the last financial year due to the coronavirus pandemic as well as subsequent lockdowns and restrictions to curb the spread of infections.

Releasing the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) on Monday said the revenue deficit at the end of the last fiscal was 7.42 per cent. In absolute terms, the fiscal deficit works out to be Rs 18,21,461 crore (provisional). As per the CGA data for fiscal 2020-21, the tax revenue collection was 105.9 per cent of the Revised Estimates (RE) presented in the budget.

 

For 2020-21, the government had initially pegged the fiscal deficit at Rs 7.96 lakh crore or 3.5 per cent of the GDP. As per revised estimates in the Budget 2021-22, the fiscal deficit for the year ending March 2021 was projected to jump to 9.5 per cent of the GDP or Rs 18,48,655 crore due to rise in expenditure and moderation in revenue amid the pandemic. For this fiscal (2021-22), the government expects the fiscal deficit to be at 6.8 per cent of the GDP.

Fiscal deficit had soared to a seven-year high of 4.6 per cent of the GDP in 2019-20, mainly due to poor revenue realisation. As per another set of data released by the CGA on Monday, the fiscal deficit for the first month of the current fiscal was 5.2 of the budget estimates. During April 2020, it was 35.1 per cent amidst the nationwide lockdown announced by the government to check the spread of coronavirus infections, according to the CGA. In absolute terms, the April 2021 fiscal deficit was Rs 78,699 crore. As per the Union Budget presented in Parliament in February 2021, the fiscal deficit in the year ending March 2022 was estimated at Rs 15,06,812 crore or 6.8 per cent of the GDP.

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