Govt not seeking Rs 3.6 lakh crore from RBI, clarifies DEA Secretary SC Garg
Business | November 09, 2018 15:25 ISTGarg said that the government is discussing ways to fix appropriate economic capital framework of RBI.
Garg said that the government is discussing ways to fix appropriate economic capital framework of RBI.
The government's finances have shown improvement in July with fiscal deficit at 86.5 per cent of the Budget Estimate (BE), mainly on account of higher revenue collection, as per official data.
Data furnished by the Controller General of Accounts (CGA) showed that the fiscal deficit during the corresponding four months of the previous fiscal was 92.4 per cent.
Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices kept the rupee under pressure.
Interim Finance Minister Piyush Goyal assured that government will maintain stability in the economy and meet all economic parameters fixed by it
The fiscal deficit target for the last financial year was revised upwards to 3.5 per cent of the GDP from original projection of 3.2 per cent, following GST implementation and deferment of spectrum auction.
Official data released by the Comptroller General of Accounts (CGA) today showed that during April-January, the capital expenditure during the period stood at Rs 2.64 lakh crore.
The government has revised its 2018-19 fiscal deficit projections to 3.3 per cent of GDP and for the current fiscal to 3.5 per cent of GDP, against original targets of 3 per cent and 3.2 per cent, respectively.
Calling this year's upward revision of fiscal deficit target to 3.5 per cent from 3.2 per cent a "one-off aberration", Subhash Chandra Garg said the economy is well on its path of fiscal consolidation despite a "small pause of a year"
A slower broadening of the tax base after the note-ban and GST implementation as well as weather- related impacts on crops could contribute to revenue slippage, it warned.
In the given scenario, analysts say that the fiscal deficit could now rise to 3.5 per cent of the GDP and this slippage means that the expected target for the next fiscal – 3 per cent, will not be adhered to.
Though analysts are opining that the government may relax the fiscal consolidation roadmap targets, Deutsche Bank says it may stick to curtailing the fiscal gap at 3 per cent.
As much as Rs 3.18 lakh crore has been received as advance tax up to December, 2017-18, reflecting a growth of 12.7 per cent over the year ago period.
The data furnished by the Comptroller General of Accounts (CGA) showed that April-November fiscal deficit was 85.8 per cent of the budget in the like period of the last fiscal.
TCA Anant said that it was a conscious policy reform and the surprise about its impact on fiscal deficit was befuddling because the move had led to expenditure profile shifting towards beginning of the year with revenue profile remaining the same.
Arun Jaitley said the government had met its fiscal targets by rationalising expenditure and plugging leakages, according to a Finance Ministry release.
Twin factors of soon-to-be-released GDP data as well as fiscal deficit figures led to intense selling pressure in the markets.
The deficit stood at 79.3 per cent of the target during the same period of 2016-17, as per official data.
The 2017-18 deficit -- the difference between revenue and expenditure -- has been pegged at Rs 5.46 lakh crore for 2017-18, as compared to the deficit of Rs 5.34 lakh crore for the last fiscal.
According to analysts, one of the reasons for the dip in the RBI's revenue was the cost of printing new currency and also return of junked notes post demonestisation
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