India’s fiscal deficit in April-May stood at 8.2 per cent of the Budget Estimates (BE), as compared to 59 per cent in the same period last year. The government could limit the fiscal deficit mainly due to better revenue receipts led by record Goods and Services Taxes (GST) collection and dividends from the Reserve Bank of India (RBI). The deficit was 30 per cent less than last year’s Rs 4.7 trillion.
Economists, however, fear that the deficit could be high going forward on account of higher outlay on the free food scheme and fertilisers subsidy and other sops announced by Finance Minister Nirmala Sitharaman on Monday as part of an economic relief package. According to the government’s statistics office, fiscal deficit in the first two months of the current financial year was at Rs 1.23 trillion, making the amount 8.2 per cent of the BE. The net tax revenue was 15.1 per cent at Rs 2.33 trillion. While Net non-tax revenue was at Rs 1.16 trillion, which is 48 per cent of BE. The better tax collection was mainly due to growth in GST collection in April and over Rs 1 trillion in May, while the jump in non-tax revenue was on account of RBI’s surplus transfer of Rs 99,122 crore to the central government. Centre has set a target of Rs 2.43 trillion for non-tax revenue receipts, which includes dividend and profit from RBI, banks and other financial institutions.