India’s Fiscal deficit for 2020-21 was at 9.3 per cent or ₹18.21 lakh crore of the gross domestic product (GDP), lower than 9.5 per cent estimated by the Finance Ministry in the revised Budget estimates, according to the CGA data. It was lower than the data estimated by the Finance Ministry.
A country’s fiscal balance is measured by its government’s revenue vis-à-vis its expenditure in a given financial year. Fiscal deficit, the condition when the expenditure of the government exceeds its revenue in a year, is the difference between the two. The government also sees a deficit situation as an opportunity to expand policies and schemes, including welfare programmes, without having to raise taxes or cut spending in the Budget.
Unveiling the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) on Monday said that the revenue deficit at the end of the fiscal was 7.42 per cent. Net tax receipts were ₹14.24 lakh crore, while total expenditure was ₹35.11 lack crore, the data showed.
On February 1, the government revised its fiscal deficit target for FY 9.5% of GDP or ₹18,48,655 crore for the financial year 2020-2021, instead of its original target of 3.5% of GDP as the coronavirus pandemic led to lower tax collection and higher spending. In absolute terms, the fiscal deficit works out to be ₹18,21,461 crore. For this financial year, the government had initially pegged the fiscal deficit at ₹7.96 lakh crore or 3.5 per cent of the GDP in the budget presented in February 2020.
Fiscal deficit had soared to a high of 4.6 per cent of the Gross Domestic Product (GDP) in 2019-20, mainly due to poor revenue realisation.