35 C
Delhi
Monday, September 21, 2020

India could see fiscal deficit balloon to over 8 per cent of GDP this year

- Advertisement -

gdp economyNew Delhi, Sep 2 (IANS) With economic disruptions set for a long haul due to Covid-19 pandemic, India could see its fiscal deficit this year to balloon to over 8 per cent of GDP, brokerages analysing the deficit numbers post release of August GST collection data have said.

The Controller General of Accounts on Monday said that country’s fiscal deficit has expanded to 103.1 per cent of Budget Estimate in the April-July period primarily due to lower tax collection and higher expenditure for Covid-19 relief.

According to a report on Indian economy by Kotak Institutional Equities, low economic activity and lower tax collections coupled with expanded Covid-19 related expenditure have created a scenario where the deficit would widen.

It could go up over the estimated levels of 8 per cent to 9 per cent or more if the Centre did not cut its expenditure by Rs 1.7 lakh crore while increasing spent on infrastructure sectors, the brokerage report said.

Government’s expenditure in the four-month period (April-July) of FY21 was around 35 per cent of budget estimates with revenue expenditure growth of around 12 per cent and capital expenditure growth of 4 per cent.

But the concern is on revenue collections, with GST collections being at just around Rs 3.1 lakh crore in the five month period (April-August) against the budget estimate of Rs 13.4 lakh crore for FY21. This means that in the rest of the year collections should go up to Rs 1.5 lakh each month. This looks impossible in the current situation.

“Even though there will be some improvement in collections over the next few months, we could still witness a CGST shortfall of Rs 1.5-2 lakh crore against FY2021BE,” the Kotak report said.

“With gradual reopening of the economy, tax collections will improve over the next few months. We have already seen some improvement in the activity levels. However, we have factored in our revised GDP growth of (-)11.5 per cent (nominal at (-)10 per cent) in our fiscal estimates and revise our GFD/GDP forecast to 8 per cent,” the brokerage said.

The report has factored in shortfall of Rs 5.3 lakh crore in total receipts, Covid- related expenditure of around Rs 3 lakh crore (announcement of Rs 2.7-3.2 lakh crore with fiscal impact of Rs 1.8 lakh crore till now), and overall expenditure cuts of Rs1.7 lakh crore while increasing spending in railways and roads.

In the absence of any expenditure cuts, the fiscal deficit could overshoot 8 per cent, the report said.

The fiscal deficit is the total amount by which the government’s expenses for a year exceeds its revenues.

The gross tax revenue of the government is already down 30 per cent in April-July period.

The government has used the escape clause in the FRBM Act for fY20 and fy21 as the fiscal deficit has been expanded by 0.5 per cent of the target to 3.8 and 3.5 per cent of respectively. But the Covid-19 pandemic has completely changed the dynamics.

For the current fiscal, the government’s borrowings target has already been raised by over 50 per cent since additional expenditure and funding needs to stimulate the economy hit by Covid-19 pandemic has pushed up the need to mobilise resources.

Accordingly, the estimated gross market borrowing in the financial year 2020-21 has now been set at Rs 12 lakh crore in place of Rs 7.80 lakh crore as per budget estimates for the current year.

Source: IANS

India Updates
India Updates is an independent news & Information website. Follow us for regular updates on News and Information.

Follow Us On

Related News

ASUS enters commercial PC market in India with 11 products

Mumbai, Sep 21 (IANS) ASUS India, the Indian arm of Taiwanese IT major, on Monday forayed into the commercial PC market in India with...

Digital media uncontrolled, courts should make rules for it first: Centre to SC

New Delhi, Sep 21 (IANS) In the Sudarshan News controversy, the Centre has reiterated that there is no need for the Supreme Court to...

Extremely concerned about balancing dignity, free speech: SC on Sudarshan News issue

New Delhi, Sep 21 (IANS) The Supreme Court on Monday said that it is extremely concerned about the balance of the right to dignity...

Negativity not in Bollywood, exists only on TV channels: Anubhav Sinha

By Justin Rao, Mumbai, Sep 21 (PTI) Anubhav Sinha says the negative perception about the Hindi film industry has been manufactured on TV news...

Right to protest must not hamper right to mobility of others: SC

The Supreme Court on Monday said Right to Protest of one section has to be in balance with others' Right to Mobility on a...

Xiaomi’s ‘Mi India on Wheels’ begins retail journey in India

New Delhi, Sep 21 (IANS) Xiaomi’s smartphone and smart TV sub-brand Mi India on Monday launched ‘Mi Store on Wheels’ to take the retail experience...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Trending Topics In India

Covid 19 India Updates

COVID-19 recovery rate in India crosses 80 per cent mark

New Delhi, Sep 21 (PTI) India''s recovery rate of COVID-19 cases has crossed the 80 per cent mark with over 90,000 recoveries recorded for...

COVID-19 recovery rate in India crosses 80 per cent mark

New Delhi, Sep 21 (PTI) India''s recovery rate of COVID-19 cases has crossed the 80 per cent mark with over 90,000 recoveries recorded for...

More than 78% people used connections to get Covid ICU bed: Survey

New Delhi, Sep 21 (IANS) Only four per cent patients were able to get a Covid-19 ICU bed through the routine process, while 78...

ICMR completes second serosurvey, analysis underway in final stage

New Delhi, Sep 20 (IANS) The Indian Council of Medical Research (ICMR) has completed the second round of the countrywide serological survey (serosurvey) to...

‘Irresponsible behaviour’ behind Covid spike: Harsh Vardhan

New Delhi, Sep 21 (IANS) Union Health Minister Harsh Vardhan on Sunday held "irresponsible behaviour" of people responsible for the surge of Covid-19 cases...

Covid effect: Monsoon Session may be curtailed, parties agree

New Delhi, Sep 20 (IANS) Amid a surge in Covid-19 cases in the country, all political parties in a Business Advisory Committee (BAC) of...

Trending News In India

More than 78% people used connections to get Covid ICU bed: Survey

New Delhi, Sep 21 (IANS) Only four per cent patients were able to get a Covid-19 ICU bed through the routine process, while 78...

Digital media uncontrolled, courts should make rules for it first: Centre to SC

New Delhi, Sep 21 (IANS) In the Sudarshan News controversy, the Centre has reiterated that there is no need for the Supreme Court to...

Extremely concerned about balancing dignity, free speech: SC on Sudarshan News issue

New Delhi, Sep 21 (IANS) The Supreme Court on Monday said that it is extremely concerned about the balance of the right to dignity...

Negativity not in Bollywood, exists only on TV channels: Anubhav Sinha

By Justin Rao, Mumbai, Sep 21 (PTI) Anubhav Sinha says the negative perception about the Hindi film industry has been manufactured on TV news...

Right to protest must not hamper right to mobility of others: SC

The Supreme Court on Monday said Right to Protest of one section has to be in balance with others' Right to Mobility on a...

Xiaomi’s ‘Mi India on Wheels’ begins retail journey in India

New Delhi, Sep 21 (IANS) Xiaomi’s smartphone and smart TV sub-brand Mi India on Monday launched ‘Mi Store on Wheels’ to take the retail experience...

Trending Showbiz

Negativity not in Bollywood, exists only on TV channels: Anubhav Sinha

By Justin Rao, Mumbai, Sep 21 (PTI) Anubhav Sinha says the negative perception about the Hindi film industry has been manufactured on TV news...

Don’t ask actors about things not related to them: Manoj Bajpayee

BY DURGA CHAKRAVARTY (IANS) Bollywood celebrities are asked for their opinions on just about everything these days, National Award-winning actor Manoj Bajpayee notes. How...

Manushi Chhillar: Don’t think your size defines your fitness

Mumbai, Sep 20 (IANS) Beauty queen-turned-actress Manushi Chhillar says fitness for her is all about finding a balance, and that is actually a personal...

Fashion designer Sharbari Dutta found dead at Kolkata residence

Kolkata, Sep 18 (PTI) Eminent fashion designer Sharbari Dutta was found dead under mysterious circumstances at her Kolkata residence, prompting the police to register...

Sushant case: Forensic re-examination hints at discrepancies

New Delhi, Sep 17 (IANS) The 'medico legal opinion' of forensic experts, which holds the key to unravelling the mystery shrouding the death of...

Gulshan Devaiah: Depression is used as an expression

New Delhi, Sep 17 (IANS) Actor Gulshan Devaiah says the problem with accepting depression as a disease is that a lot of people consider...

Trending Sports

We’ve to make sure Delhi Capitals do right by the fans: Ponting

Dubai, Sep 20 (IANS) Delhi Capitals (DC) coach Ricky Ponting expects his players to “do right by the fans” and give their best in the face...

BCCI, Emirates board sign MoU to boost cricketing ties

Dubai, Sep 20 (PTI) The BCCI and Emirates Cricket Board (ECB) on Saturday signed a Memorandum of Understanding (MoU) and hosting agreement to boost...

Plan to send Indian boxers to Europe for traning, competition

New Delhi, Sep 19 (IANS) Senior Indian boxers could go on a 45-day long European tour, with possible stops in France, Italy, and Poland,...

Team that will overcome testing conditions will triumph

New Delhi, Sep 19 (IANS) After months of uncertainty, the 13th edition of the Indian Premier League (IPL) is set to get underway on...

FIVB confirms cancellation of Volleyball Club World C’ships 2020

Lausanne (IANS) World volleyball governing body FIVB has cancelled the FIVB Volleyball Club World Championships 2020 due to the ongoing Covid-19 pandemic."The FIVB has...

Latest Trending News In India

ASUS enters commercial PC market in India with 11 products

Mumbai, Sep 21 (IANS) ASUS India, the Indian arm of Taiwanese IT major, on Monday forayed into the commercial PC market in India with...

Digital media uncontrolled, courts should make rules for it first: Centre to SC

New Delhi, Sep 21 (IANS) In the Sudarshan News controversy, the Centre has reiterated that there is no need for the Supreme Court to...

Extremely concerned about balancing dignity, free speech: SC on Sudarshan News issue

New Delhi, Sep 21 (IANS) The Supreme Court on Monday said that it is extremely concerned about the balance of the right to dignity...

Negativity not in Bollywood, exists only on TV channels: Anubhav Sinha

By Justin Rao, Mumbai, Sep 21 (PTI) Anubhav Sinha says the negative perception about the Hindi film industry has been manufactured on TV news...

Right to protest must not hamper right to mobility of others: SC

The Supreme Court on Monday said Right to Protest of one section has to be in balance with others' Right to Mobility on a...