India on track to meet deficit target

New Delhi: India will comfortably meet its fiscal deficit FY22 target on the back of a strong rebound in revenues, said the Economic Survey 2021-22. The fiscal support given to the economy as well as to the health response caused the fiscal deficit and government debt to rise in 2020-21.

"However, a strong rebound in government revenues in 2021-22 has meant that the government will comfortably meet its targets for the year while maintaining the support, and ramping up capital expenditure," said the Survey tabled in the Parliament on Monday by Union Finance Minister Nirmala Sitharaman.

According to it, the strong revival in revenues "means that the government has fiscal space to provide additional support if necessary".

The revenue receipts of the Central government during April- November 2021 have gone up by 67.2 per cent (YoY), as against an estimated growth of 9.6 per cent in the 2021-22 Budget Estimates.

"The tax collections have been buoyant for both direct and indirect taxes. The gross monthly GST collections have crossed Rs 1 lakh crore consistently since July 2021."

"On account of a sustained revenue collection and a targeted expenditure policy by the government of India, the fiscal deficit for April-November 2021 has been contained at 46.2 per cent of Budget Estimates (BE) which is nearly one third of the proportion reached during the same period of the previous two years."

As per the Survey, the primary deficit during the period April to November 2021 turned up at nearly half of the level it had reached during April to November 2019.

"This implies that the government has the fiscal capacity to maintain the support, and ramp up capital expenditure when required."