In the current fiscal ending March 31, the fiscal deficit is likely to touch Rs 18.48 lakh crore or 9.5 per cent of the GDP.
In absolute terms, the fiscal deficit stood at Rs 12,34,004 crore at the end of January 2021, as per the data released by the Controller General of Accounts (CGA).
The lockdown imposed to curb spreading of coronavirus infections had significantly impacted business activities and in turn contributed to sluggish revenue realisation.
The fiscal deficit or gap between the expenditure and revenue had breached the annual target in the month of July during this financial year. The government received Rs 12.83 lakh crore — 80 per cent of the RE 2020-21 — up to January, 2021. This included Rs 11.01 lakh crore of tax revenue.
The tax revenue collection was 82 per cent of the RE of 2020-21 as compared to 66.3 per cent of the RE (2019-20) during the same period last fiscal. Non-tax revenue was 67 per cent of the RE. During the corresponding period of the last fiscal, it was 73 per cent.
According to the CGA data, total expenditure incurred stood at Rs 25.17 lakh crore or 73 per cent of the RE in the current financial year. Last fiscal, it was 84.1 per cent of the RE during the same period.
For this financial year, the government had initially pegged the fiscal deficit at Rs 7.96 lakh crore or 3.5 per cent of the GDP in the budget presented in February 2020.
However, as per revised estimates in the Budget 2021-22, the fiscal deficit in the year ending March is estimated to soar up to 9.5 per cent of the GDP or Rs 18,48,655 crore. This will be due to rise in expenditure on account of the outbreak of COVID-19 and moderation in revenue.
Fiscal deficit had soared to a seven-year high of 4.6 per cent of the Gross Domestic Product (GDP) in 2019-20, mainly due to poor revenue realisation.