April-January fiscal deficit hits 128.5% of FY20 revised estimates

The Centre’s fiscal deficit for the April-January period came in at Rs 9.85 trillion, or 128.5 per cent of the 2019-20 revised estimates of Rs 7.7 trillion, against 121.5 per cent for the same period last year. This came largely on the back of higher capital expenditure and lower tax and divestment receipts, the official data released on Friday showed.

As a percentage of the Budget estimates of Rs 7.04 trillion, the fiscal deficit was a staggering 140 per cent. 

Additionally, with the October-December 2019-20 quarter gross domestic product data also released on Friday, it can now be calculated that the fiscal deficit for April-December was 6.18 per cent. Finance Minister Nirmala Sitharaman has revised the fiscal deficit target for the full year to 3.8 per cent from 3.3 per cent.

According to the data released by the Controller General of Accounts, revenue receipts during April-January were at Rs 12.5 trillion or 67.6 per cent of the revised estimates for 2019-20, against 68.3 per cent for the same period last year. Total receipts were at 66.4 per cent, against 67.5 per cent in the year-ago period. 

Non-debt capital receipts, which includes divestment, were at 40 per cent of the full year revised estimates compared with 52.9 per cent for the same period last year. Net tax revenue was 66.3 per cent, compared to 68.7 per cent. 


“Typically, the Centre’s receipts tend to sharply exceed its expenditures in the last few months of each fiscal year, which aids in reining in the full year fiscal deficit. While we estimate the Centre’s gross tax receipts to be considerably lower than the revised estimates, lower tax devolution to the states would bolster the government’s net tax revenues,” said Aditi Nayar, principal economist, ICRA.

“There remains considerable uncertainty regarding the magnitude and the timing of the actual payments that would be made by the telecom and non-telecom license holders to the Centre to settle the adjusted gross revenue dues. Therefore, it remains unclear to what extent the collections of the Centre from other communication services will differ from the revised estimates,” Nayar said. 

Nayar said there remained lack of certainty regarding whether the Centre would meet its full disinvestment target, which has been revised to Rs 65,000 crore from Rs 1.05 trillion.

For April-January, total expenditure was Rs 22.68 trillion or 84.1 per cent of revised estimates, higher than 81.5 per cent in the corresponding period of the last fiscal year. Revenue expenditure was 85 per cent compared with 82.7 per cent, and capital expenditure was 76.9 per cent compared with 72.7 per cent.



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