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).
- 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.