India's fiscal pain continues to get worse

Fiscal deficit had soared to seven-year high of 4.6 per cent of GDP in 2019-20, mainly on account of poor revenue realisation which dipped further towards the close of March because of the lockdown.

The country's fiscal deficit during the first quarter of this fiscal widened to Rs 6.62 lakh crore or 83.2 per cent of the budget estimates, mainly on account of poor tax collections due to the coronavirus lockdown.

Fiscal deficit during the corresponding period of last year was 61.4 per cent of the budget estimates.

The government had pegged the fiscal deficit for 2020-21 at Rs 7.96 lakh crore or 3.5 per cent of the GDP in the Budget which was presented by Finance Minister Nirmala Sitharaman in February.

These figures, however, may have to be revised significantly in view of the economic disruptions created by the COVID-19 crisis.

In absolute terms, the fiscal deficit stood at Rs 662,363 crore at end-June, as per data by the Controller General of Accounts (CGA).

Fiscal deficit had soared to seven-year high of 4.6 per cent of the Gross Domestic Product (GDP) in 2019-20, mainly on account of poor revenue realisation which dipped further towards the close of March because of the lockdown.

As per the CGA data, the government's revenue receipts stood at Rs 150,008 crore or 7.4 per cent of the budget estimates (BE).

During the same period of the last fiscal, the realisation was 14.5 per cent of the BE.

Tax revenue stood at Rs 1,34,822 crore or 8.2 per cent of BE during the first three months of the fiscal.

During the first quarter of the last fiscal, the tax revenue was 15.2 per cent of the BE.

Total receipts of the government amounted to 6.8 per cent of the BE or Rs 153,581 crore.

In the Budget, the government had estimated the total receipts for the fiscal at Rs 22.45 lakh crore.

The government's total expenditure stood at Rs 815,944 lakh crore or 26.8 per cent of the BE at end-June.

During the same period of the last fiscal, the total expenditure was 25.9 per cent of the BE.

The data further showed that Rs 134,043 crore has been transferred to state governments as devolution of share of taxes by the central government up to June, which is Rs 14,588 crore lower than the previous year.

Out of the total revenue expenditure, Rs 160,493 crore was on account of interest payments, while major subsidies accounted for Rs 78,964 crore.

Photograph: Thomas White/Reuters