India breaches fiscal deficit target in November

New Delhi: In a worrying sign, India reported a fiscal deficit of  Rs 6.12 lakh crore for the April-November period, which is 112 per cent of the budgeted target for FY18 due to fall in GST revenues. During the same period of FY17, the deficit stood at 85.8 per cent of that year’s target.

The Controller General of Accounts’ (CGA) data showed that the Centre’s revenue receipts were at Rs 8.04 lakh crore in the eight months to November, which work out to 53.1 per cent of the Budget Estimate (BE) of Rs 15.15 lakh crore for FY18.

The government’s total expenditure was Rs 14.78 lakh crore at November-end, or 68.9 per cent of the BE. It was 65 per cent of the BE a year ago.

For FY18, the Centre aims to bring down the fiscal deficit to 3.2 per cent of GDP.

“Taken together, the fiscal deficit at 112 percent of the FY18 BE upto November 2017, the disappointing GST collections for November and the recent increase in the government’s issuance calendar, signal a fiscal slippage in FY18,” said Icra.

It said that the magnitude of the fiscal slippage in FY18 would be governed by factors such as whether GST collections record an uptick in Q4 FY18, in a manner similar to the seasonal pickup that used to be displayed by excise duty and service tax, and benefiting from improved compliance after the introduction of the e-way bill.

It said that if the proposed acquisition of the government’s stake of 51 per cent in HPCL by ONGC gets completed, total disinvestment proceeds would exceed the  budgeted level, helping to offset some of the feared shortfall in tax and non tax revenue.