India's fiscal deficit widened further in November raising concerns that the country would breach its budgeted target for the third straight year.
The gap between the government's revenue and expenditure widened to Rs 8.07 lakh crore as of November, according to data released by the Controller General of Accounts. That's 114.8 percent of the budgeted estimate of Rs 7.04 lakh crore for 2019-20.
The fiscal deficit stood at 102.4 percent of the target in October and 114.8 percent of the FY19 target in November last year.
Capital expenditure stood at Rs 2.13 lakh crore as of November 2019. That's 63.3 percent of the Rs 3.38-lakh-crore estimate.
Other Highlights:
- Revenue receipt stood at 50.1 percent of the budgeted target of Rs 19.6 lakh crore.
- Tax revenue stood at 45.5 percent of the budgeted target of Rs 16.4 lakh crore.
- Non-tax revenue stood at 74.3 percent of the budgeted target of Rs 3.13 lakh crore.
The government is likely to run a fiscal deficit higher than 3.3 percent of the gross domestic product announced in Union Budget 2019-20 because of the corporate tax rate cut. “Revenue foregone for the reduction in corporate tax rate is Rs 1.45 lakh crore per annum,” Finance Minister Nirmala Sitharaman had said.
Gita Gopinath, chief economist at the International Monetary Fund, recently said India needs to keep to its fiscal deficit target. “For India, macro stability is very important, which means stability on the fiscal front. A clear sense of keeping to the target of fiscal consolidation is very important. That would require increasing revenue mobilisation and also rationalising expenditure,”
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