Centre’s Fiscal Deficit in October

The Union government's fiscal deficit works out to be ₹5.47 lakh crore or 36.3% of the budget estimates at the end of October 2021 on the back of improvement in revenue collection, according to the data released by the Controller General of Accounts (CGA). 

Important Highlights: 

  • The deficit figures in the current fiscal appear better than the previous financial year when the gap between expenditure and revenue had soared to 119.7% of the last year's Budget Estimates (BE) mainly on account of a jump in expenditure to deal with the COVID-19 pandemic.
  • In absolute terms, the fiscal deficit was ₹5,47,026 crore at the end of October, the CGA said.
  • For the current financial year, the government expects the deficit at 6.8% of GDP or ₹15.06 lakh crore.
  • According to the CGA, the Government of India received about ₹12.79 lakh crore (64.8 per cent of corresponding BE 2021-22 of total receipts) up to October, 2021 comprising ₹10.53 lakh crore tax revenue (net to centre), ₹2.06 lakh crore of non-tax revenue and Rs 19,722 crore of non-debt capital receipts.

 

What is a Fiscal Deficit? 

  • A country’s fiscal balance is measured by its government’s revenue vis-a-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. Fiscal deficit is calculated both in absolute terms and as a percentage of the country’s gross domestic product (GDP).
  • The fiscal deficit of a country is calculated as a percentage of its GDP or simply as the total money spent by the government in excess of its income.
  • Fiscal deficit serves as an indicator of how well the government is managing its finances.
  • Fiscal deficit = Total Expenditure – Total Revenue (excluding the borrowings)
  • The fiscal deficit is usually expressed as a percentage of GDP.