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India's budget deficit exceeded 55% of the budget estimate in just two months (April-May) of the current fiscal year. But it remains below what was recorded at the same time last year, according to official data released Friday.
The budget deficit is the difference between revenue and expenditure normally expressed as a percentage of GDP. The government aims to keep the budget deficit at 3.3% of GDP for the current fiscal year, while reaching 3.5% in the last fiscal year (2017-2018). Rating agencies closely monitor the number of deficits before deciding on sovereign ratings and outlooks. At present, most agencies have given the latest investment grade rating with a stable or positive outlook.
According to the monthly account for the central government by the Comptroller General, the total receipt was just over 7 percent. It included tax revenues of more than 1.02 million secular crores, while it earned 24,049 crore in non-tax revenue and 1,040 crore in non-borrowed capital income. Non-debt capital receipts include loan recovery (₹ 570 crore) and divestment by public sector enterprises ₹ 434 crore. More than 1.11 billion crore has been transferred to state governments as a devolution of taxes by the Center until this period, which is 15.117 billion pounds higher in the corresponding period of the last fiscal year [19659004]. more than ₹ 4.72 crores lakh, which represents about 19.3% of the budget estimates. Since the last fiscal year, the entire fiscal year ended March 31, which helps the government start spending on the first day of the new fiscal year. Previously, the fiscal year was completed in May-June, which meant that the government was starting to spend only after 3-4 months and after six months, thus affecting economic activity and hence growth.
Experts said the April-May budget deficit registered a welcome year-over-year decline due to strong growth in indirect tax and non-tax revenues and near-stagnant spending, which allowed rapid increase in investment spending early in the year. part of the year. Nevertheless, at 55% of the budget forecast for year 19, the GoI budget deficit for the first two months of the year was considerable
Aditi Nayar, chief economist at ICRA, Stagnating Expenditures The year-on-year basis reflects in part the advance that was recorded in the same months in 2017, following the anticipated presentation of the Union budget, as well as the A sharp drop in the main grant item. She also mentioned that, in contrast to the stagnation of spending, capital expenditure grew substantially by 21% in the first two months of this year, particularly in the defense, road and railway sectors. and transfers to states. The increase in excise duties on fuels is reduced to absorb part of the impact of higher crude oil prices, and the extent to which dividends and profits, and disinvestment reach the goals. budgeted, revenue growth in FY19. In addition, "the adequacy of budgeted expenditures for proposals introduced in the Union budget for the year 19 such as the PSM and the National Health Protection Scheme, oil subsidies and others, and bank recapitalization would affect fiscal space for spending, "she said.
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