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Fiscal Deficit in January
Why is it in the news ?
- As per the official data released, fiscal deficit widened in January to ₹7.7 lakh crore, or 121.5% of the Budget Estimates for the full year.
More in the news
- The fiscal deficit stood at ₹7 lakh crore in the April-December 2018 period, which was 112.4% of the full year target.
- Last year, the fiscal deficit in the April to January period was at 113.7% of the full year target.
- There is slower-than-projected growth in tax receipts.
- Major subsidies up to Q3 FY19 were Rs 2.6 lakh crore compared to Rs 2.18 lakh crore in the year ago period, as food and fuel subsidy payments reached 99% of the Revised Estimates.
Fiscal Deficit
- Fiscal deficit indicate the excess of government expenditure over receipts except borrowing.
i.e. Fiscal deficit = Total Expenditure – Total Receipts except borrowings.
- Fiscal deficit represents the total borrowing requirements of the central government.
- Most importantly, fiscal deficit indicate the financial health of the budget and that of the government.
- Higher fiscal deficit thus becomes a matter of concern. On the other hand, a manageable fiscal deficit is a welcome sign.
Source
The Hindu.