The government’s fiscal deficit touched 135.2 per cent of the full-year target at February-end mainly due to slower pace of revenue collections, according to an official data released on Tuesday. In actual terms, the fiscal deficit or the gap between expenditure and revenue was Rs 10,36,485 crore, the data by the Controller General of Accounts (CGA) showed. During February, there was hardly any impact of the coronavirus outbreak on the economy. However, it would be very much visible when CGA releases the numbers for the entire fiscal.
The government aims to restrict the fiscal deficit at 3.8 per cent of the GDP or Rs 7.1 lakh crore in 2019-20. The deficit was 134.2 per cent of 2018-19 Budget Estimate (BE) in the corresponding period.
According to CGA, the government’s revenue receipts were Rs 13.77 lakh crore or 74.5 per cent of the 2019-20 revised estimate (RE). In the same period last fiscal, the collections were 73.2 per cent of the RE.
The data also showed that total expenditure was 91.4 per cent of RE or Rs 24.65 lakh crore. During the corresponding period in 2018-19, the expenditure was 89.1 per cent of the RE. Of the total spending, the capital expenditure was 87.5 per cent of the RE, higher than 86.6 per cent of the estimates during the same period in 2018-19. While presenting the Union Budget last month, Finance Minister Nirmala Sitharaman had raised fiscal deficit target to 3.8 per cent of the GDP from 3.3 per cent pegged earlier for 2019-20 due to revenue shortage.
The government had earlier estimated the fiscal deficit to be at 3.3 per cent of the GDP for 2019-20 but due to revenue shortage, the Centre had to increase it by invoking the “escape clause” in the Fiscal Responsibility and Budget Management (FRBM) Act.
The ”escape clause” allows the government to breach its fiscal deficit target by 0.5 percentage points at times of severe stress in the economy, including periods of structural change and those when growth falls sharply.
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