Fiscal deficit of India, stood at 18.2 % of Budget Estimates (BE) in the first quarter of 2021-22 against 83.2% in the same period last year. The new fiscal deficit is less than half of last year’s fiscal level of Rs 6.6 trillion which was recorded during pandemic induced-lockdown.

According to the controller general of accounts data, the government received Rs 5.47 trillion up to june (27.7% of corresponding BE 2021-22 of total receipts), which comprises Rs 1.27 trillion of non-tax revenues, Rs 4.12 trillion of tax revenues and non-debt capital receipts worth Rs 7,402 crore.

The central government incurred an expenditure of Rs 8.21 trillion which is 23.6% of the corresponding BE 2021-22. The Centre can limit the fiscal deficit to Rs 2.7 trillion which is an 8-year low, mainly due to some contraction in revenue expenditure and buoyancy in tax receipts. Besides, surplus transfer by reserve bank of india helped Centre to attain over half the target for non-tax revenue.

Gross tax revenues almost doubled in the first quarter reaching 24% of BE, which reflects the low base of nationwide lockdown, despite the pandemic second wave impact on economic activities. The government's spending, however, recorded a volatile trend in the April-June period on a monthly basis.

But the economists expected that the full-year deficit was to overshoot BE of Rs 15.1 trillion, if the government missed the Rs 1.75 trillion disinvestment target.They further warned that a subdued rise in spending may slow down the pace of GDP expansion in the fiscal year's first quarter.

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