On February 28, 2020, According to the Controller General of Accounts (CGA) of Department of Expenditure, Ministry of Finance, fiscal deficit of the country reached 128.5 % of the estimate for the whole year at the end of January 2020.The deficit stood at Rs 9,85,472 crore ($137.05 billion).The deficit was 121.5 % of the revised budget estimate (RBE) for the same period of the previous financial year-FY 2018-19.Key Points:
i.Expenditure and receipts: According to CGA, the total expenditure till the end of January 2020 was Rs 22.68 lakh crore, which is 84.1 % of the revised estimate. It was 81.5 % in the same period a year ago.
While, the net tax receipts in the April-January period were Rs 9.98 lakh crore.
ii.Fiscal deficit estimated at 3.8 %in the budget: The government has set a budget estimate of Rs 7,66,846 crore for the fiscal year ending March 31, 2020. In the budget presented in Parliament earlier in February 2020, Finance Minister Nirmala Sitharaman raised the fiscal deficit estimate for the current fiscal from 3.3 %to 3.8 %. The reason for this is stated to be a decrease in revenue collection.
iii.According to the monthly accounting data of the CGA,the revenue receipts stood at Rs 12.5 lakh crore in April-January. This is 67.6 % of the revised estimate of the current financial year-FY 2019-20 & was 68.3 % of the revised estimate a year ago. Total receipts for the same period stood at 66.4 % of the revised estimate compared to 67.5 % in the same period a year ago.
It happens when the total expenditure of government is greater than the total revenue generated.
The borrowings of the government are not added in the revenue, but Fiscal deficit indicates government’s borrowings only.
Hence Fiscal deficit = Total expenditure – Total revenue excluding borrowings
About CGA (Controller General of Accounts (CGA):
CGA,under the Department of Expenditure, Ministry of Finance, is the Principal Accounting Adviser to Government of India and is responsible for establishing and maintaining a technically sound Management Accounting System.
Current CGA– Smt. Soma Roy Burman.