India's fiscal deficit reaches 96% of FY target in Oct; FM to follow fiscal glide path
India reported a fiscal deficit of Rs 5.25 trillion ($81.36 billion) for April-October, or 96.1 percent of the budgeted target for the current fiscal year that ends in March 2018.
India reported a fiscal deficit of 5.25 trillion rupees ($81.36 billion) for April-October, or 96.1 percent of the budgeted target for the current fiscal year.
The deficit was 79.3 percent of the full-year target during the same period a year ago, a Reuters report said, adding that net tax receipts in the first seven months of 2017/18 fiscal year were 6.34 trillion rupees, as per the government data.
Union Finance Minister Arun Jaitley said that India intends to follow the glide path as far as the fiscal deficit is concerned.
The FM, who is scheduled to present his last full budget in February ahead of next general elections in 2019, said, "The last three years we have an exemplary record as far as maintaining that glide path is concerned. We intend to move on that track."
Addressing a leadership summit organised by local media The Hindustan Times, aitley said India aims to trim the fiscal deficit to 3.2 percent of gross domestic product in 2017/18 compared with 3.5 percent in the previous year.
Making an observation on fiscal deficit, Devendra Kumar Pant, Chief Economist and Senior Director (Head - Public Finance), India Ratings & Research, said, "April-October 2017 fiscal deficit has impacted by below par performance of non-tax revenue, it declined 43.4% from April-October 2016. This decline is mainly due to low surplus transferred by RBI. After decline in capital expenditure growth in September 2017, it increased in October 2017 and April-October capital expenditure growth has been healthy 30.3%."
He further added, "Revenue expenditure growth is slowing down from May 2017. Despite first quarter GDP growth slowing down to 5.7%, net tax revenue growth of 19.5% although is healthy, the clear picture would emerge after settlement of input tax credit under GST. Ind-Ra believes encouraging disinvestment receipt will help government to move closer to 3.2% fiscal deficit target in FY18."
The government on Thursday released the highlights of the monthly account upto October 2017. The highlights of the same are given below:
The government has received Rs 7,67327 crore (47.9% of corresponding BE 17-18 of total receipts) upto October 2017 comprising Rs 6,33,617 crore Tax Revenues (Net to Centre), Rs 95,151 crore of Non-Tax Revenues and Rs 38,559 crore of Non-Debt Capital Receipts. Non-debt capital receipts consists of recovery of loans (Rs. 8,394 crore) and disinvestment of PSUs (Rs. 30,165 crore).
Rs3,37,280 crore has been transferred to the state governments as devolution of share of taxes in this period.
Total expenditure incurred by the Centre is Rs 12,92,648 crore (60.2% of corresponding BE 17-18), out of which Rs 11,29,853 crore is on revenue account and Rs.1,62,795 crore is on capital account. Out of the total revenue expenditure,Rs.2,57,909 crore is on account of interest payments and Rs.1,91,336 crore is on account of major subsidies.
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