April–August fiscal deficit at 31.05% of FY22 target

India’s fiscal deficit during the first five months of this fiscal (April–August 2021) touched ₹4,68,009 crore, or 31.05% of the target for the fiscal. The budget estimate (BE) for fiscal deficit during the current fiscal is ₹15,06,812 crore or 6.8% of Gross Domestic Product (GDP).

According to data released by the government on Friday, total receipts during April-August stood at ₹8,08,672 crore, while total expenditure was ₹12,76,681 crore. “Government of India has received ₹8,08,672 crore (40.9% of corresponding BE 2021-22 of total receipts) up to August 2021 comprising ₹6,44,843 crore in tax revenue (net to Centre), ₹1,48,650 crore of non-tax revenue and ₹15,179 crore of non-debt capital receipts,” said a release from the ministry of finance.

“Non-debt capital receipts consist of recovery of loans of ₹6,808 crore and miscellaneous capital receipts of ₹8,371 crore. ₹2,12,606 crore has been transferred to state governments as devolution of share of taxes by the government up to August 2021,” the release added.

Outlining the government expenditure, the finance ministry release said, “Total Expenditure incurred by government is ₹12,76,681 crore (36.7% of corresponding BE 2021-22), out of which ₹11,04,813 crore is on revenue account and ₹1,71,868 crore is on capital account. Out of the total revenue expenditure, ₹2,78,371 crore is on account of interest payments and ₹1,47,398 crore is on account of major subsidies.”

It should be noted that the fiscal deficit during April-July in the current fiscal was about 21% of the budgeted target.

In the corresponding period of the previous financial year, the fiscal deficit touched a whopping 109% of the budgeted target on account of the enhanced expenditure by the Centre in the wake of disruptions caused by Covid–19.

Core sector growth at 11.6% in August

India’s index of eight core industries witnessed 11.6% growth to 133.5 in August this year over the same month in the last year—when it had contracted by 6.9%. According to data released by the commerce ministry, coal production was up 20.6% in the month while the other sectors that witnessed growth are refinery production, electricity, and natural gas.

Coal production during the month of August increased by 20.6% year-on-year, while refinery production was up 9.1% and electricity generation climbed 15.3%. Steel production was up 5.1% and cement registered a growth of 36.3% in the month of August, according to data from the ministry of commerce. Fertiliser and crude oil production witnessed a decline of 3.1% and 2.3% in the month compared with the same period last year.