India's April-Aug fiscal deficit reaches over 31% of FY22 target

India's April-Aug fiscal deficit reaches over 31% of FY22 target
Source: IANS

New Delhi, Sep 30 (IANS) India's April-August budgetary fiscal deficit reached over 31 per cent of the FY22 target, official data showed on Thursday.

The fiscal deficit -- the difference between revenue and expenditure -- for the April-August 2021-22 period stood at Rs 468,009 crore, or 31.1 per cent of the budget estimates (BE).

The FY22 deficit has been pegged at Rs 15.06 lakh crore.

Besides, the CGA data showed that the fiscal deficit during the corresponding months of the previous fiscal was 109.3 per cent of that year's target.

The Central government's total expenditure stood at Rs 1,276,681 crore (36.7 per cent of BE) while total receipts were Rs 808,672 crore (40.9 per cent of BE).

ICRA Chief Economist Aditi Nayar said: "With a YoY expansion of 114 per cent in revenue receipts amidst a cautious 2 per cent rise in total expenditure, the GoI's fiscal deficit compressed to Rs 4.7 trillion in April-August 2021 from Rs 8.7 trillion in the year-ago period, while printing moderately lower than the Rs 5.5 trillion seen in the pre-Covid period of FY2020."

"As expected, the pace of expansion of revenue receipts moderated to 114 per cent at end-August 2021 from the month-ago level of 194 per cent, as the base normalised with the progressive economic recovery last year, as well as the inflows of the RBI's surplus during August 2020."

India Ratings and Research's Principal Economist, Sunil Kumar Sinha, said: "Despite healthy revenue collection, revenue expenditure in FY22 (April-August) has contracted 0.8 per cent compared to FY21 and grown just 6.3 per cent compared to FY20. Non-interest revenue expenditure which can spur growth in the economy has barely grown in comparison to FY20 and contracted 5.6 per cent in comparison with FY21."

"Though this is a bit perplexing, government's recent decision of lifting expenditure cap may help in revenue expenditure picking up in coming months. Yet India Ratings and Research (Ind-Ra) believes the upside to economic growth due to higher expenditure will be limited."