India’s fiscal deficit standing at 9.3% of GDP for FY21, the estimate was 9.5%

GDP
Image Courtesy: Asian Development Bank

India’s Fiscal deficit for 2020-21 stood at 9.3 percent i.e. ₹18.21 lakh crore of the gross domestic product (GDP). According to the CGA data, this number is .2 percent lower than the 9.5 percent estimated GDP by the Finance Ministry in the revised Budget estimates.

While revealing the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) on Monday said that the revenue deficit at the end of the fiscal was 7.42 percent. According to the data released, the net tax receipts were ₹14.24 lakh crore, while the total expenditure stood at ₹35.11 lakh crore.

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On February 1, the Indian government revised its fiscal deficit target to 9.5% of GDP or ₹18,48,655 crore for the financial year 2020-2021. However, the original target was 3.5% of GDP since the coronavirus pandemic resulted in lower tax collection and higher expenditure of the nation.

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In other terms, the fiscal deficit seems to be standing at ₹18,21,461 crore. For this financial year, the Modi government had initially secured the fiscal deficit at ₹7.96 lakh crore or 3.5 percent of the GDP. This was mentioned in the budget presented in February 2020. The fiscal deficit had soared to a new high of 4.6 percent of the Gross Domestic Product (GDP) in 2019-20. The main reason? Poor revenue realization.

Meanwhile, India’s economy expanded by 1.6% in the March quarter of FY21. However, it contracted 7.3% in the full financial year, said the data released by the government’s statistics office on Monday. This improvement has come due to the calibrated and steady opening of the economy, the government has explained.