Fiscal Deficit (Union government)

India's fiscal deficit surpasses the full year target during Apr-Jan'19.

Published monthly by Controller General of Accounts (CGA), Ministry of Finance, GoI. Updated to the month of January 2019. (Published on February 26, 2019)  

Recent Data Trend

During Apr-Jan'19, the central government's gross fiscal deficit rose to Rs. 7.7 trillion, equivalent to 121.5% of the budgeted estimate (BE) for FY2019. In FY18, the deficit stood at 113.3% of the BE in the corresponding period last year. The government has been exceeding the full year fiscal deficit target since the last 10 months. In the interim budget (Feb 1st, 2019) the government revised the fiscal deficit target for 2018-19 to 3.4% of GDP from 3.3% earlier.

On the revenue front, the government's revenue receipts during Apr-Jan'19 stood at 68.3% of the BE. This was lower than 72.8% of BE in Apr-Jan'18. Lower tax revenue collections via lower excise duties, customs and service tax collections can be attributed for this decline. In terms of non-tax revenue collections during FY19, it stood at 66.1% of BE, 13.4% higher than the collections during Apr-Jan'18. The increase in non-tax revenue to Rs 1.6 trillion can be ascribed to higher receipts from interest payments.

The total expenditure by end Jan'19 reached 81.9% of BE amounting close to Rs. 20 trillion. Government's consumption expenditure accounted for 82.7% of the full year revenue budget estimate. Expenditure towards interest payments has been in line with the previous year’s trend of 78.9% of BE. Government has incurred a lower capital expenditure at 72.7% of BE compared to its 96.9% of BE last year. The revenue deficit of the government during Apr-Jan'19 stood at 143.4% of BE higher than 109.2% of BE in the corresponding period last year. The government should boost capital expenditure in order for the sustainable growth recovery which declined to 7.1% in Jul-Sep'18.

Non-debt receipts, which mainly includes disinvestment from the capital side have been around 53.3% of the budget target, lower than 57.3% in the comparable period a year ago. Disinvestment receipts have been around 45% of its BE. The buying of central public sector enterprises will improve the proceeds from disinvestment.

The revised fiscal deficit target of 3.4% of GDP for FY19, as announced in the interim budget could be attained, given that the RBI's interim dividend (Rs. 280 billion) will also help in improving the non-tax revenue collections. But this should come at the cost of the government's capital expenditure during the rest of the months in this fiscal year.

Brief Overview

The central government accounts are divided mainly into two parts- Revenue Account and Capital Account. The revenue account consists of revenue receipts and revenue expenditure. Revenue receipts are accumulated from tax revenues (both via direct and indirect taxes) and non-tax revenues (interest payments dividend & profits etc.), while the revenue expenditure is broadly the expenditure which doesn't result in the creation of assets (administrative expenses of government, interest charges on debt incurred, subsidies etc.)

Similarly, the capital account consists of capital payments and capital expenditure. The capital receipts mainly include recoveries of loans & advances and earnings from disinvestment while the capital expenditure is the expenditure on acquisition of buildings, lands, and investments in bonds, shares etc.

The excess of expenditure over receipts (on both accounts) gives the fiscal health measure of the government known as the gross fiscal deficit (GFD). Another important gauge of fiscal operations is the revenue deficit (excess of expenditures over receipts in the revenue account). The increase in revenue deficit generally implies that the government is increasingly using its finances to fund its recurring non-productive expenses and no actual asset creation is taking place. To discipline the government in its financial management, the Fiscal responsibility, and Budget Management (FRBM) Act was brought in during the UPA regime in 2003. This act aimed at bringing fiscal discipline by reducing India's fiscal deficit (5.7% of GDP in 2003) to 3% of GDP and elimination of revenue deficit by March 2008. (Revenue deficit stood at 2% of GDP or fiscal year 2016-17)

Government Accounts- Annual

Note: The years represent the fiscal years so 2017 denotes FY 2017 (April 2016-March 2017). The share of GDP for deficits has been calculated using GDP (2004-05=100). The values for 2018 represent the budget estimates for the fiscal year April 2017- March 2018. 


   Revenue Receipts The earnings made by the government which neither create liabilities or reduce assets of the government. For example, receipts from tax collections, interest on investments, dividend earnings and earnings from services provided.
   Capital Receipts The earnings made by the government which creates liabilities (borrowing from the public in form of PPF and small saving deposits, National Pension Scheme etc. ) or reduce assets (divesting stake in a particular company, called disinvestment or recovering loans made to state governments.)
   Non-debt Capital Receipts These are capital receipts which do not create debt for the government such as recovery of loans made and selling a stake in a public company.
   Revenue expenditure It is the expenditure made by the government on a recurring basis such as administrative expenses, interest payments on loan taken by the government, pensions, subsidies etc.
   Capital expenditure It is a productive, asset-creating (or liability reducing) long-period, non-recurring expenditure of the government. For example; expenditure on creating the infrastructure (roads, electricity dams etc.), loans made to state governments and repayment of loans by the central government (reducing liability).
   Gross Fiscal Deficit The fiscal deficit of the government is the difference between the total expenditure incurred and the total non-debt capital receipts (total receipts minus the earnings from borrowing) of the government. It indicates the total borrowing requirements (incl. the need for interest payments) of the government.
   Revenue Deficit It is the difference between the revenue receipts and the revenue expenditure of the central government. Revenue deficit indicates the excess amount of expenditure by the government to fund current consumption needs rather than for productive asset-creation.
   Gross Primary Deficit It is the difference between the fiscal deficit of the current year and the interest payments on the previous borrowings made by the government. It indicates how much of the government borrowing is going to meet expenses other than interest payments.


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Next Release Date: March 28th, 2019