India's fiscal deficit for FY20 stood at 4.59 per cent of GDP, missing the government estimate by nearly 80 basis points, according to the government data released on Friday. The government had set a target of 3.8 per cent for the last fiscal. FY20 fiscal deficit was recorded at 9.36 lakh crore as against Rs 7.67 lakh crore in FY19. The fiscal deficit is 122 per cent of Rs 7.67 lakh crore budget aim of the government for fiscal 2019-20.
According to the Controller General of Accounts (CGA) data, the revenue deficit was 3.27 per cent. The effective revenue deficit was 2.36 per cent, the data showed. The increase in the fiscal deficit has been mainly on account of shortfall in revenue collection during FY20. The revenue receipts during the year worked out to be only 90 per cent of the revised estimate.
Fiscal Deficit is the difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure.
The total receipts of the government were Rs 17.5 lakh crore against the estimate of Rs 19.31 lakh crore in absolute terms. The data showed the government's total expenditure was Rs 26.86 lakh crore, lower than Rs 26.98 lakh crore projected earlier.
"The central government finances are expected to be pressured in FY21 on account of revenue owing to the restriction on economic activity shortfalls (lower GST collections, shortfalls in disinvestment proceeds) and an increase in government spending towards relief measures. The constrained financial position of the government has prompted an increase in the government's market borrowing program by Rs 4.2 lakh crores to Rs. 12 lakh crores for FY21. Considering the likely revenue shortfalls and increased expenditure owing to special economic stimulus package in FY21, we estimate the central government's fiscal deficit to widen to around 7% of GDP in FY21 as against the budgeted 3.5% of GDP," CARE Ratings said.
Meanwhile, India's GDP grew at 3.1 per cent in the final quarter of financial year 2019-20, lowest in 44 quarters, according to the government data released on Friday. Overall growth for FY20 slumped to 4.2 per cent - lowest since FY09 when GDP was 3.09 per cent - compared to 6.1 percent in FY19, the Central Statistics Office (CSO) said.