India's fiscal deficit during April-August touched 96.1 per cent of the budget estimate for the full fiscal year that ends on March 2018. The deficit was 76.4 percent of the full-year target during the same period a year ago. The surge in the current fiscal has been mainly due to the increase in expenditure.
In absolute terms, the fiscal deficit - difference between expenditure and revenue - was Rs 5.25 lakh crore during April-August, 2017-18, according to figures released by the Controller General of Accounts (CGA) on Friday. For 2017-18, the government aims to bring down the fiscal deficit to 3.2 per cent of the GDP.
In the last fiscal, it had met the deficit target of 3.5 per cent of the GDP. The CGA data showed that the government's revenue receipts worked out at Rs 4.09 lakh crore during April-August period, which works out to be 27 per cent of the budget estimate (BE) of Rs 15.15 lakh crore for the whole year. In the comparable period last fiscal, revenue receipts comprising taxes and other items were 28 per cent of the target.
The CGA data shows that the government's expenditure had been increasing on sequential basis and totalled Rs 9.5 lakh crore at Augustend or 44.3 per cent of the budget estimates.In the comparable period last fiscal, the expenditure was 40.5 per cent of the estimate.
Finance Minister Arun Jaitley is under pressure to bring the economy back on track, even if is at the cost of fiscal deficit. However, reports suggest that the Finance Minister is going to stick to fiscal deficit target and may sell bonds to raise funds for extra spending.
After the lowest GDP growth of 5.7 per cent in April-June quarter, economists and policy advisors suggested the government to take measures to put the economy back on the growth path. However, for that the government has to spend more and create demands.
The Finance Minister in February had budgeted to raise 5.8 trillion rupees in 2017-18 through bond sales to bridge the fiscal deficit of 3.2 percent of GDP. Earlier this week, Economic Affairs Secretary Subhash Chandra Garg said that the government would leave the full-year borrowing target intact and sell bonds worth 2.08 trillion rupees between October and March.
"We do not foresee extra borrowing at this point in time, but we are conscious there may be a possibility," Garg said after meeting with the RBI officials.
(With inputs from agencies)