Fiscal deficit for Apr-May stands at 8.2% of budget estimate

New Delhi: The April-May budgetary fiscal deficit of India reached 8.2 per cent of FY22 target, official data showed on Wednesday.

India's fiscal deficit -- difference between revenue and expenditure -- for April-May 2021-22 period stood at Rs 123,174 crore, or 8.2 per cent of the budget estimates (BE).

The FY22 deficit has been pegged at Rs 15.06 lakh crore.

The CGA data also showed that fiscal deficit during the corresponding months of the previous fiscal was 58.6 per cent of that year's target.

"Benefitting from a jump in tax and non tax receipts amidst a contraction in revenue expenditure, the Government of India's fiscal deficit was limited to Rs 1.2 trillion in April-May 2021, less than 30 per cent of last-year's level of Rs 4.7 trillion recorded during the nationwide lockdown," ICRA's Chief Economist Aditi Nayar said.

"It is unclear if the sharp rise in non tax revenues in May 2021 reflects the receipt of the higher-than-budgeted surplus from the RBI", he added.

The Central government's total expenditure stood at Rs 477,961 crore (13.7 per cent of BE) while total receipts were Rs 354,787 crore (18 per cent of BE).

"April and May 2020 were unusual months due to the nationwide lockdown and again April and May 2021 witnessed regional or local lockdowns resulting in loss of economic activities and revenue generation" said India Ratings & Research's Principal Economist Sunil Kumar Sinha.

"Thus, any assessment of revenue and expenditure for the month of April and May 2021 on year on year growth terms or as a percentage of FY22 budgeted figures will be incorrect assessment of the trend due to aberration. Further, the change in RBI's accounting year to April-March from July-June has advanced the release of dividend payment by the RBI to government" he added.