Government Accounts See Drop In Net Revenue In February. Here's Why
The current levels of fiscal deficit come amid a dip in revenue receipts and continued capital expenditure.
An additional installment of devolution, or a transfer to states from the central pool of taxes, could have reduced the government's revenue receipts in February.
Data released by the Controller General of Accounts on Thursday showed a negative figure of Rs (-) 30,388 crore as net tax revenue for the month.
The Union government released two instalments of tax devolution amounting to Rs 1.42 lakh crore on the last day of the month of February.
This release was in addition to the tax devolution of an instalment of Rs 71,061 crore already made on Feb. 12, making it the third instalment in the same month.
The Union government's fiscal deficit till February expanded to 86.5% of the budgetary target for the current financial year, with one month still to go.
In value terms, the fiscal deficit comes up to Rs 15 lakh crore of the total limit set at Rs 17.34 lakh crore, or 5.8% of the GDP. In comparison, the government spent 82.8% over the corresponding period last year.
The current levels of fiscal deficit come amid a dip in revenue receipts and continued capital expenditure, as compared with the same period in the last fiscal.
The monthly increase in the fiscal deficit in February came up to Rs 3.98 lakh crore, rising significantly as the financial year draws to a close, according to data issued by the Controller General of Accounts on Thursday.
Details of the Union government's accounts, released by the Ministry of Finance, show that net tax revenue took a hit of Rs (-) 30,388 crore, which brought down the government's total receipts to Rs 22.09 lakh crore in February from Rs 22.17 lakh crore in January.
In terms of pace, capex rose in the second month of the final quarter. In February, the capex increased to Rs 84,426 crore, as compared with Rs 47,557 crore in January.
This puts the total capex spend in the current fiscal at Rs 8.05 lakh crore, or 84.8%, of the revised capex target of Rs 9.49 lakh crore. The corresponding level of capex made during the same period last year was 81.1%.
A comparison of key expenditure and revenue heads with their levels in the same period last year reveals that the government has maintained a tight lid on revenue expenditure.
The April–February period of the current fiscal, as compared with the same period last fiscal, showed the following:
Revenue receipts stood at 81.9% of the budgetary estimate of Rs 22.09 lakh crore, as against 84.3% achieved over the corresponding period last fiscal.
Total expenditure: 83.4% vs. 83.4%, maintaining the previous year's levels.
Revenue deficit: 87% vs. 83%.
Capex: 84.8% vs. 81.1%.
Net tax revenue: 79.6 vs. 83%.
Non-tax revenue: 95.9% vs. 95%, buoyed by a surplus dividend from the RBI earlier in the year.
Spend on major subsidies: 87% vs. 88%, led by the nutrient-based fertiliser subsidy, which has already exhausted the budgeted levels.