India's fiscal deficit surged to Rs 10.75 lakh crore at the end of November2020, which is equivalent to 135.1 per cent of the 2020-21 Budget Estimates (BE). This is predominantly attributed to low revenue collections owing to disruptions in business activities during the pandemic. Fiscal deficit had also soared to a seven-year high of 4.6 per cent of GDP in 2019-2020.
The fiscal deficit currently stands at Rs 10,75,507 crore according to the latest data released by the Controller General of Accounts (CGA).
Moreover, the lockdown that was imposed by the Centre in an attempt to manage the spread of the virus in the country contributed to the sluggish revenue collection by directly impacting the functioning of businesses. In fact, the fiscal deficit, which is defined as the difference between expenditure and receipts, had crossed the targeted limit for this year in July itself.
The Modi government's total receipts stood at Rs 8,30,851 crore as of November 2020, accounting for 37 per cent of the estimates. This included Rs 6,88,430 crore in tax revenue (42.1 per cent), Rs 1,24,280 crore in non-tax revenue (32.3 per cent) and Rs 18,141 crore from non-debt capital receipts, which come from the recovery of loans and disinvestment proceeds.
The fiscal deficit at the end of November 2019 had stood at 114.8 per cent of 2019-20 budget estimates, while both tax and non-tax revenue collection were also higher at 45.5 per cent and 74.3 per cent of the last fiscal's estimates, respectively.
According to the data, over Rs 3.34 lakh crore were transferred to state governments as devolution of share of taxes by the Government of India up to November 2020.
As for government expenditure, CGA reported it to be at Rs 19,06,358 crore, or 63 per cent of this fiscal's buget estimates. This includes Rs 16,65,200 crore on revenue accounts, of which over Rs 3.8 lakh crore went to interest payments, while Rs 2,02,119 crore were given towards major subsidies.
On capital accounts, Rs 2,41,158 was expended.Back in February this year, Finance Minister Nirmala Sitharaman had announced the government's plan of pegging the fiscal deficit for FY2021 at Rs 7.96 lakh crore. This figure accounts for 3.5 per cent of the GDP in the union budget, which warrants for significant revision owing to the economic disruptions from the lockdown and the pandemic.