AMN /NEW DELHI
The government has violated its fiscal deficit target given in the Budget for 2017-18 in November itself. During the April-November period, the fiscal deficit was 112 per cent of its Rs 5.5 lakh crore target for current fiscal year, according to data revealed by the Controller General of Accounts.
An official statement said the fiscal deficit as at the end of April to November 2017 for the current financial year stood at 112 per cent. Comparably, it stood at 85.8 per cent during the corresponding period of the previous financial year.
In absolute terms, the difference between government revenue and expenditure stood at Rs6.12 lakh crore. The government was expecting the difference to be at Rs5.46 lakh crore during the period under consideration.
The higher fiscal gap is due to the lower than expected revenue collections at the back of higher government expenditure during the current financial year.
An official statement said the government has received Rs8.66 lakh crore till November 2017. This includes ₹6.99 lakh crore tax revenue, Rs1.05 lakh crore of non-tax revenue and Rs61,849 crore of Non- Debt Capital Receipts.
Through these Non-Debt Capital Receipts, the government mopped up Rs9,471 crore through recovery of loans and Rs52,378 crore through disinvestment of public sector undertaking companies.
Of the total collections,Rs3.85 lakh crore has been transferred to State governments as devolution of share of taxes by the government during this period.
Total Expenditure incurred by government during the period stood at Rs14.78 lakh crore, out of which Rs12.94 lakh crore is on Revenue Account and Rs1.84 lakh crore is on Capital Account.
Definition of ‘Fiscal Deficit’
Definition: The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.
Description: The gross fiscal deficit (GFD) is the excess of total expenditure including loans net of recovery over revenue receipts (including external grants) and non-debt capital receipts. The net fiscal deficit is the gross fiscal deficit less net lending of the Central government.
Generally fiscal deficit takes place either due to revenue deficit or a major hike in capital expenditure. Capital expenditure is incurred to create long-term assets such as factories, buildings and other development.
A deficit is usually financed through borrowing from either the central bank of the country or raising money from capital markets by issuing different instruments like treasury bills and bonds.