India’s April-June fiscal deficit reaches 18.2% of FY22 target

India requires an active, counter-cyclical fiscal policy: Economic Survey.

New Delhi, July 30 (IANS) India’s April-June budgetary fiscal deficit reached 18.2 per cent of the FY22 target, official data showed on Friday.

The fiscal deficit — the difference between revenue and expenditure — for the April-June 2021-22 period stood at Rs 274,245 crore, or 18.2 per cent of the budget estimates (BE).

The FY22 deficit has been pegged at Rs 15.06 lakh crore.

Besides, the CGA data showed that the fiscal deficit during the corresponding months of the previous fiscal was 83.2 per cent of that year’s target.

The Central government’s total expenditure stood at Rs 821,644 crore (23.6 per cent of BE) while total receipts were Rs 547,399 crore (27.7 per cent of BE).

“The sharp jump in tax and non-tax receipts and mild contraction in revenue expenditure, curtailed the Government of India’s fiscal deficit to an eight year low Rs 2.7 trillion in Q1 FY2022, less than half of last year’s level of Rs 6.6 trillion recorded during the nationwide lockdown,” ICRA Chief Economist Aditi Nayar said.

“Reflecting the low base of the nationwide lockdown, gross tax revenues nearly doubled in Q1 FY2022 and reached 24 per cent of the FY2022 BE, despite the impact of the second wave of Covid-19 on economic activity.”

India Ratings & Research’s Principal Economist Sunil Kumar Sinha said: “Union government fiscal deficit in 1QFY22 at Rs 2.74 trillion was 18.2 per cent of FY22, lowest in last 12 fiscals. This has been possible due to 206.1 per cent growth in net tax revenue of union government in 1QFY22 which is 26.7 per cent of FY22 (BE).”

“Change in accounting year of Reserve Bank of India has helped in higher non-tax revenue collection and its growth jumped to 738.4 per cent in 1QFY22 which is 52.4 per cent of FY22 (BE). If government fails to achieve big-ticket disinvestment programme in FY22, the gains visible in the 1QFY22, may not hold and the government would find it difficult to attain FY22 fiscal deficit target of Rs 15.07 trillion.”

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