Fiscal deficit reined in at 8.2% of Budget Estimate

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July 01, 2021 5:00 AM

At Rs 15,835 crore, the capex in May crashed by 41%, partly mirroring the impact of the second Covid wave, even though the April-May data showed a rise of 14%.

The government also reined in expenditure in April.

The Centre’s fiscal deficit in April-May touched 8.2% of the budget estimate (BE) for the fiscal year 2021-22, against 58.6% a year before, as tax and non-tax revenue saw a massive spurt, driven by a favourable base.

The government also reined in expenditure in April.

However, analysts say the deficit is set to soar, thanks to the announcement of a relief package this month with greater outlay for free grains, fertiliser and healthcare, among others.

Nomura now estimates FY22 fiscal deficit to rise to 7.1% of GDP from the budgetted 6.8%.

At Rs 15,835 crore, the capex in May crashed by 41%, partly mirroring the impact of the second Covid wave, even though the April-May data showed a rise of 14%.
The Centre’s spending in May rose 23% on year, after a 26% drop in April, and against a marginal decrease in the budgetted expenditure for full FY22.

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