Govt achieves fiscal deficit of 3.4% of GDP

With the total expenditure at about 97% of the budgeted amount, the central government has achieved the fiscal deficit target of 3.4% of the Gross Domestic Product (GDP) for the financial year 2018-19, finance ministry sources said.

The fiscal deficit, the gap between the government’s revenue and expenditure, has been met with the help of savings from various ministries' budgeted expenditure, some spending cuts and National Small Savings Funds (NSSF), a senior finance ministry told DNA Money.

"The revenue collection is less than expected. But we have managed our expenditure through other resources,” the official said.

The government expenditure has been compressed by around Rs 60,000 crore, which includes savings from ministries at around Rs 47,000 crore, a spending cut of close to Rs 9,000 crore and some savings under the head of transfer of grants to the states. The finance ministry has managed to compensate the remaining shortfall by dipping into the NSSF.

Revenue collections have seen a major shortfall during 2018-19, with direct taxes likely to see a shortfall of Rs 40,000-50,000 crore and indirect taxes of Rs 70,000-80,000 crore against the target of Rs 12 lakh crore and Rs 10.45 lakh crore respectively.

"We are maintaining the fiscal deficit target. There is a shortfall in resources due to which we have to delve into public accounts and spend from NSSF. While we have maintained the expenditure level, there have been savings in the normal course without putting any pressure on the ministries. If we take into account expenditure along with NSSF, then it will be around 97%," according to the official.

The government is likely to have spent around Rs 23.96 lakh crore out of the total budgeted expenditure of Rs 24.57 lakh crore for the financial year 2018-19. This includes mostly savings from ministries and also some portion of the expenditure cut. Off-budgetary support provided to the Food Corporation of India (FCI) was to the tune of Rs 92,000 crore in the two tranches of Rs 65,000 crore and Rs 27,000 crore, sources said.

"Of the total expenditure, the ministries could not spend around Rs 47,000 crore by March 31. An amount of Rs 9,000 crore was withheld by the finance ministry on the last day of the financial year. This could not have been utilised by the concerned ministries. Also, there were some savings on account of non-transfer of grants to the states. The grants could not be released owing to some states not providing utilisation certificate," the official said.

There were about 8-10 ministries which could not spend the allocated funds in time. Some amount under PM-Kisan and Ayushman Bharat schemes also remained unspent.

According to experts, the government has a cushion of overshooting the fiscal deficit number by 0.08% to 3.44% as it would be rounded off to 3.4%. However, it is difficult for the government to have achieved the fiscal deficit target in absolute terms, they said. The fiscal deficit has been budgeted at Rs 6.34 lakh crore for 2018-19.

Meanwhile, higher non-tax revenue collections, and disinvestment proceeds crossing the Rs 80,000 crore target by Rs 5,000 crore too helped the government compensate for the shortfall in tax revenues. An amount of Rs 15,000 crore from Goods and Services Tax (GST) Compensation Cess carried forward from last year also led to a reduction in the indirect tax-shortfall.

CUTTING EXPENDITURE

• Rs 60,000 crore – Compression in government expenditure
   
• Rs 47,000 crore – savings by the ministries