The Centre on Friday reported a fiscal deficit of Rs 5.25 lakh crore in the first five months of the 2017-’18 financial year. This is 96.1% of the budgeted target for the current financial year that ends in March 2018, Reuters reported.
Fiscal deficit is an indication of how far beyond its means the government is spending.
The figure is much higher than that in the corresponding period last year, when the deficit was 76.4% of the budget’s target.
The government’s revenue deficit during the April-August period was Rs 4.31 lakh crore and revenue spending was Rs 9.5 lakh crore, The Financial Express reported. The tax revenue of the government for this period was Rs 3.4 lakh crore, 27.28% of the Budget estimates, and the non-tax revenue was Rs 69,256 crore, 24% of the Budget estimates.
What the government’s target was
For the 2017-’18 financial year, the government had decided on a fiscal deficit target of 3.2% of the Gross Domestic Product and 3% for the next three years.
On September 21, Reuters had reported that the government might consider a plan to loosen the fiscal deficit target for the current financial year and enable the Centre to spend an additional Rs 50,000 crore to revive the economy.