The central government’s fiscal deficit in the first eleven months of FY21 ran below the revised estimate of 9.5% of the GDP presented at the time of the Union Budget, shows data released by the Controller General Of Accounts.
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Tax Revenue Growth Slows
The fine print of the February accounts suggests that tax revenue growth slowed.
For the month of February, gross tax revenue grew 2.2% year-on-year. This was lower than the 19.65% rise seen in January.
Cumulatively, between April-February, gross tax revenues are now just 0.7% below the collections seen in the same period in the previous fiscal.
In comparison to budget estimates, tax receipts are at 90% of the revised estimates while total revenue receipts are at 88% of revised estimates.
The sharp moderation in the pace of growth of gross tax revenues to a subdued 2% in February 2021 from the high 20% in January 2021, was on account of the year-on-year contraction in corporation tax collections as well as the ad-hoc settlement of IGST (integrated GST) of Rs 48,000 crore with the states.Aditi Nayar, Principal Economist, ICRA
Nayar added that another tranche of IGST settlement of Rs 28,000 crore has been announced in March 2021, which will dampen the pace of growth in tax revenues for March as well.
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Expenditure
In February, the government’s total expenditure was 53% higher than last year, the data shows. April-February expenditure is 14.3% above a year earlier.
Compared to revised estimates, capital expenditure is at 92.4% while revenue expenditure is at 80%.
A part of the government’s expenditure this year is going towards settling past dues and subsidy arrears.
As of February, the total subsidy payout stood at Rs 3.6 lakh crore compared to the revised estimate of Rs 5.95 lakh crore, suggesting that some of the adjustment will continue in March and bring the eventual fiscal deficit closer to 9.5% of the GDP.
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