India’s fiscal deficit in the first seven months of the financial year, at ₹6.49 lakh crore, exceeded the budgeted target for the entire year, coming in at 103.9% of that target, according to official data released on Friday.
The fiscal deficit was 96.1% of the budgeted amount in the same period of the previous year.
Net tax receipts were ₹6.61 lakh crore in the April-October 2018 period, which is only 44.7% of the budgeted estimates for the year, with just five months to go. Total receipts, at ₹8.08 lakh crore, were only 44.4% of the budgeted amount for the year. Total expenditure, on the other hand, stood at ₹14.5 lakh crore, which is 59.6% of the budget estimate for the year.
“While expenditure continues to grow, total receipts in October 2018 shrank from October 2017,” Devendra Kumar Pant, chief economist, India Ratings and Research, said. “Non-debt capital receipts in April-October 2018 are nearly half of April-October 2017.”
India Ratings expects the fiscal deficit for the year to be 3.5% of GDP, higher than the government’s target of 3.3%. The government, however, has repeatedly expressed its commitment to meeting its target.
Meanwhile, the growth rate of eight infrastructure sectors slowed to 4.8% in October due to contraction in the production of crude oil, natural gas and fertilizers, according to official data released on Friday.
Eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity had grown 5% in October 2017. Fertilizer production dropped sharply by 11.5%, crude oil by 5% and natural gas by 0.9% in October over the year-ago month, the Commerce and Industry Ministry data showed.
Coal, cement expand
The production of coal, cement and electricity, on the other hand, expanded in the month under review. In April-October 2018-19, the eight sectors recorded a growth of 5.4% against 3.5% in the same period last year.
The growth rate of refinery products declined to 1.3% in October as against 7.5% in the same month last year.
Similarly, the steel sector growth too dipped to 2.2% against 8.6% in October 2017.
The growth rate of eight core sectors, however, is more than the 4.3% expansion seen in September.
Rating agency ICRA said the modest uptick in core sector growth in October compared to September portends a pickup in IIP growth to 6.5-7.5% in that month.