India’s Fiscal Deficit Reaches 120% of Revised Full-Year Target

Fiscal deficit stood at Rs 7.15 lakh crore in the first eleven months of the current financial year.

The Indian government’s fiscal deficit reached 120 percent of the revised target in the April-February period.

Fiscal deficit, the gap between the government’s revenue and expenditure, stood at Rs 7.15 lakh crore in the first eleven months of the current financial year, as against the revised estimate of Rs 5.95 lakh crore, according to data released by the finance ministry today.

Finance Minister Arun Jaitley had previously raised the fiscal deficit target to 3.5 percent of the gross domestic product in the Union Budget 2018-19 from 3.3 percent earlier. The government had already pushed back its 3 percent target by a year from FY18 to FY19.

Net tax revenue stood at Rs 10.35 lakh crore in April-January, as against the estimate of Rs 12.7 lakh crore. Revenue deficit stood at Rs 5.24 lakh crore, which is 119 percent of the revised budget estimate.

The government’s finances came under pressure in 2017-18 due to the implementation of the Goods and Services Tax.

Volatility in revenue combined with a front-loading of spending led the government to cross its budget target by November itself. Jaitley said that this year’s accounts will account for only 11 months of revenue under GST.

(This copy has been published in an arrangement with BloombergQuint.)