Fiscal deficit touches 31.1% of annual target at end-August

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According to figures issued by the Controller General of Accounts (CGA) on Thursday, the government’s fiscal deficit was at Rs 4.68 lakh crore at the end of August or 31.1% of the Budget estimates. The current budget deficit appears to be substantially lower than the previous fiscal year, when it surged to 109.3% of estimates, owing primarily to an increase in spending to combat the Covid-19 pandemic.

The fiscal deficit, or the difference between expenditure and revenue, was Rs 4,68,009 crore at the end of August, according to the CGA.

The government estimates a deficit of 6.8% of GDP, or Rs 15,06,812 crore, in the current fiscal year.

The central government’s overall collections through to August 2021 was Rs 8.08 lakh crore, or 40.9% of the comparable Budget Estimate (BE) 2021-22.

During the same period of the previous financial year, total receipts were 16.8% of the BE of 2020-21.

Tax revenue accounted for Rs 6.44 lakh crore, or 41.7% of total collections. In the previous fiscal year, tax collection was only 17.4% of BE 2020-21.

According to the CGA, the Centre’s total expenditure up to August 2021 was Rs 12.76 lakh crore, or 36.7% of BE.

The fiscal deficit for 2020-21 was 9.3% of GDP, which was lower than the 9.5 percent forecast in the Budget’s revised estimates in February.

Eight major industries, including coal, crude oil, and steel, grew by 11.6 percent year over year in August. Coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity are the eight core industries, accounting for 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).