New Delhi: The government’s fiscal deficit touched 114.8 per cent of the full-year estimates at the end of November, stoking concerns that the gap between the target set for FY19 and the final tally could widen.

The government had budgeted fiscal deficit of Rs 6.24 lakh crore, or 3.3 per cent of the GDP, for FY19. Fiscal deficit for April-November stood at Rs 7.16 lakh crore, or 114.8 per cent of the target. It is slightly more than the 112 per cent recorded in the same period last fiscal.

Fiscal

“Fears of a fiscal slippage will persist…… There are several risks to meeting the budgeted targets for revenues and expenditures, with one of the predominant concerns arising from a possible shortfall in indirect tax collections, despite the seasonal pickup in tax revenues in the last quarter of every fiscal,” said Aditi Nayar, principal economist, ICRA Ltd.

New Delhi has maintained it would meet the fiscal deficit target for the financial year. Total expenditure up to November was 66.1 per cent of the budget estimate of Rs 24.42 lakh crore, the data showed, suggesting that while the expenditure largely remained on course, subdued tax receipts largely contributed toward bloating the deficit. Total receipts stood at Rs 8.9 lakh crore, or 49.3 per cent of BE, against 54.2 per cent for the same period last fiscal.

Net tax receipts were only 49.4 per cent of estimates compared with 57 per cent last year. Disinvestment proceeds and GST revenues have been a bit off the mark, but the provisional settlement of Integrated GST and residual GST compensation cess (after disbursal to states) could provide some help in augmenting cash flows in coming months.

Nayar said the announcement of OMO purchases by the central bank in January and persistent decline in crude prices should prevent G-sec yields from rising in immediate term. DK Pant, chief economist India Ratings, said that some course correction may have already begun.





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