Indian government’s fiscal deficit for the April-January 2020-21 period soared 66.8 per cent or Rs 12.34 lakh crore of the revised Budget estimates (RE) at the end of January of the ongoing fiscal year. The fiscal deficit at the end of January in the previous financial year was 128.5 per cent of the RE, Controller General of Accounts (CGA) data showed on Friday.

The deficit of the ongoing fiscal year is the difference between revenue and expenditure- had now been pegged at Rs 18.48 lakh crore, as compared to the earlier target of Rs 7.96 lakh crore for the last fiscal.

The government’s total expenditure stood at Rs 25.17 lakh crore (73 per cent of RE) while total receipts were Rs 12.83 lakh crore (80.1 per cent of RE).

Sunil Sinha, Principal Economist, India Ratings and Research said, “Fiscal deficit of central government in FY21 (April-January) came in at 66.8 per cent of FY21 (RE). This has become possible due to 10.4 per cent increase in net tax revenue of central government at a time when gross tax revenue has declined 0.4 per cent.”

He added that higher excise collection “Rs 2.75 trillion in FY21 for the period…and lower tax devolutions to states has helped Central government garner higher net tax revenue.”

According to Aditi Nayar, Principal Economist, ICRA, “the government of India’s fiscal deficit in the first 10 months of FY2021 was equal to two-thirds of the RE for the fiscal deficit, with revenue receipts and capital expenditure around 80 per cent of the RE, whereas only 72 per cent of the allocation for revenue expenditure had been spent.

“In our assessment, there could be a modest upside to tax revenues, whereas the revenue spending may be somewhat lower than the amount included in FY2021 RE. Therefore, the GoI’s fiscal deficit in FY2021 may end up undershooting the RE of Rs 18.5 trillion,” Nayar added.