GST collection shortfall widens India’s fiscal deficit
New Delhi, Dec 30 Shortfall in GST collections led to India’s fiscal deficit for the first eight months of 2017-18 reaching 112 per cent — Rs 6.12 lakh crore — of the full year’s target of Rs 5.46 lakh crore, official data showed on Friday.
The data furnished by the Comptroller General of Accounts (CGA) showed that April-November fiscal deficit was 85.8 per cent of the budget in the like period of the last fiscal.
As per the CGA data, net of tax revenue during the period under review was Rs 6.99 lakh crore, or 57 per cent of the estimated target.
The total receipts — from revenue and non-debt capital — during the fiscal’s first eight months were Rs 8.66 lakh crore, or 54.2 per cent of the estimates for the current year.
The data revealed that total expenditure — incurred on revenue and capital — during the April-November period was Rs 14.78 lakh crore, or at 68.9 per cent of the entire fiscal’s estimate.
The 2017-18 deficit — the difference between revenue and expenditure — has been pegged at Rs 5.46 lakh crore for 2017-18, as compared to the deficit of Rs 5.34 lakh crore for the last fiscal
“The breach in fiscal deficit can be attributed to the shortfall in GST collections, along with a reduction in meeting the overall tax collection targets. Other key reasons for the deficit breaching the target are the lower dividend receipts from PSBs,” said Anis Chakravarty, Lead Economist, Deloitte India.
“However, the union government is expected to meet the 3.2 per cent target for 2017-18 on the back of an increase in divestment flows, broad basing dividend intake from PSBs and marginally increased borrowings as a last option, which should easy the financial strain.”
According to Aditi Nayar, Principal Economist, ICRA: “Taken together, the fiscal deficit at 112 per cent of the FY2018 BE up to November 2017, the disappointing GST collections for November 2017 and the recent increase in the GoI’s issuance calendar, signal a fiscal slippage in FY2018.”
“If the proposed acquisition of the GoI’s stake of 51 per cent in Hindustan Petroleum Corporation Limited by Oil and Natural Gas Corporation gets completed in the current fiscal, total disinvestment proceeds would exceed the budgeted level, helping to offset some of the feared shortfall in tax and non-tax revenue.”