New Delhi: India overshot the revised fiscal deficit target for 2019-20, as it came in at 4.59 per cent of GDP, higher than the 3.8 per cent estimated in the revised estimates of the Budget, on account of revenue shortfall.
The data furnished by the Controller General of Accounts (CGA) showed that deficit in absolute terms at the end of March 31, 2020, stood at Rs 9.35 lakh crore as against Rs 7.66 lakh crore in the revised estimates of the Budget.
Accordingly, while the fiscal deficit in absolute terms has gone up, even as a percentage of GDP, the deficit figure has come up, mainly on account of slower GDP expansion in 2019-20.
According to ICRA’s Principal Economist Aditi Nayar, with a considerable revenue shortfall and limited expenditure compression, the Centre’s fiscal deficit overshot its revised estimates by a massive Rs 1.7 trillion, taking the deficit for FY2020 to 4.6 per cent of GDP, which is expected to contribute to a spike in G-sec yields.
“The GoI’s net tax revenues trailed the FY2020 RE by Rs 1.5 trillion, modestly exceeding our expectation of Rs 1.2-1.3 trillion,” Nayar said.
“Both direct taxes and GST collections recorded a sobering contraction in March 2020, highlighting the impact of the commencement of the lockdown on government revenues.”