The
fiscal deficit has ballooned to Rs 9.85 lakh crore in this financial year, as per govt data. In the same period last financial year, fiscal deficit stood at Rs 7.70 lakh crore.
As per data, the April-January period total spending was Rs 22.68 lakh crore compared to Rs 20.01 lakh crore YoY. January fiscal deficit stood at Rs 53,700 cr versus Rs 69,400 cr a year before.
The fiscal deficit is the shortfall in a government's income compared with its spending. It essentially means that the government is spending beyond its means.
The government aims to restrict the gap at 3.3 per cent of the
GDP or Rs 7,03,760 crore in the year ending March 2020. Finance minister,
Nirmala Sitharaman has set a fiscal deficit target of 3.5% of GDP for the year ending March 2021.
Sitharaman missed deficit target for the third year in a row, pushing shortfall to 3.8 per cent of the GDP in the current fiscal as compared to 3.3 per cent previously planned. The fiscal deficit target for the coming fiscal year starting April 1, has been fixed at 3.5 per cent.
The government forecast real economic growth will pick up to 6.0% to 6.5% in the fiscal year beginning April 1, but warned that it could mean a high fiscal deficit.
India's economic growth fell to 4.5% in the July-September quarter - hit by a sharp decline in demand that has stung businesses and forced companies to cut investment and jobs.
The FRBM committee headed by N K Singh had recommended fiscal deficit to be cut to 2.8 per cent in 2020-21 fiscal and to 2.5 per cent by FY2023.
The panel had suggested an "escape clause" in case of overriding consideration of national security, acts of war, calamities of national proportion and collapse of agriculture severely affecting farm output and incomes. Under this, a deviation from the stipulated fiscal deficit target can be taken but not in excess of 0.5 percentage points in a year.
GST collections have picked up in last three months and have crossed the Rs 1 lakh crore mark for the third month in a row in January. Govt is also expecting payment of AGR dues by telcos to help contain the fiscal deficit.