The central government expects the fiscal deficit for the financial year ended March 31 at close to the Revised Estimate of 6.9 per cent of the GDP and is sticking to its calibrated reduction to 4.5 per cent by 2025-26, according to sources.
The latest official data shows that the country’s fiscal deficit stood at Rs 13.16 lakh crore, or 82.7 per cent of the budgeted target, at the end of February in 2021-22. The government expects to keep it at around Rs 15.91 lakh crore for the full financial year 2021-22.
The sources told CNBC-TV18 that the additional Rs 1 lakh crore government expenditure in March was offset by savings by a few departments and the total expenditure is expected to be closer to FY22 RE of Rs 37.70 lakh crore.
In the latest data released on Thursday, the government’s total expenditure for FY22 at the end of February stood at Rs 31.43 lakh crore or 83.4 per cent of the current year’s Revised Estimate (RE). It was 81.7 per cent of RE in the corresponding period last financial year.
The sources said tax revenues have mave up for the lack of LIC IPO proceeds this year and the total tax mop-up is likely to exceed FY22 revised estimates. “The government has done well on collections,” one of the sources said.
Total net tax receipts stood at Rs 14.81 lakh crore, as per data released by the Controller General of Accounts (CGA) during April-February FY22. The government’s total receipts was Rs 18.27 lakh crore, or 83.9 per of the RE of Budget 2021-22. It was 88.2 per cent of the RE of 2020-21 in the corresponding period of the previous year.
The government is sticking to calibrated reduction in fiscal deficit to 4.5 per cent by 2025-26, the sources said. The government has projected to reduce the deficit to 6.4 per cent of GDP in 2022-23. The fiscal deficit, or gap between the expenditure and revenue excluding borrowing, in the last financial year stood at 76 per cent of the Revised Estimate (RE) of 2020-21.
Life Insurance Corporation of India (LIC), which has become almost synonymous with the country’s insurance industry, was set to issue its Rs 60,000-crore initial public offering in the financial year 2021-22 but hit roadblock due to geopolitical uncertainty and volatile markets. Last month, the government filed updated draft red herring prospectus with markets regulator Sebi for the LIC IPO. The IPO-bound insurer reported a net profit of Rs 235 crore in the October-December 2021 quarter, compared with Rs 90 lakh in the year-ago period.
In February, a government official had said it had time until May 12 to launch the LIC IPO without filing fresh papers with Sebi. The government intends to sell five per cent stake in LIC, which could fetch the exchequer in excess of Rs 60,000 crore.
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