April-Feb fiscal deficit at Rs 6.05 lakh crore, stands at 113% of FY17 estimate

As per data released on Friday, the country's fiscal deficit for the period April 2016 to February 2017 stood at Rs 6.05 lakh crore, an increase of 6 percent year-on-year (YoY).

This fiscal deficit is now at 113 percent of the Rs 5.3 lakh crore target for FY17.

Net tax receipts stood at Rs 8.85 lakh crore for the same period and for the month of February the deficit is seen at Rs 41,400 crore against Rs 40,600 crore (YoY).

For the month of February, the revenue deficit is at Rs 39,200 crore against Rs 44,600 crore (YoY).

The expenditure for February increased 13 percent to Rs 1.35 lakh crore (YoY) and tax receipts witnessed a jump of 19 percent to Rs Rs 93,900 crore (YoY).

Total expenditure for Arpil to February is at 17.5 lakh crore which is 87 percent to the revised budget estimates.

Revenue deficit came at Rs 4.44 lakh crore and the primary deficit stood at Rs 2.01 lakh crore for the April to March period.

Reacting to the released data Aditi Nayar, Principal Economist, ICRA said: "The Government of India's fiscal balances up to February 2017 raise the possibility that some of its fiscal targets may be missed, particularly with the revenue deficit being as high as 143% of the revised estimate level. Corporate tax collections, non-tax revenues and capital expenditure appear likely to fall short of the revised estimates for FY2017."

"There is a relatively lower likelihood of the fiscal deficit overshooting the target, even though it had crossed 113% of the revised estimate by February 2017, given the typical surge in tax revenue collections in the month of March each year," she added.

Also, roll out of the goods and services tax (GST) is expected to have a temporary inflationary impact on the economy.

Listing her outlook going ahead Nayar said, "While the likely pace of growth of the Government of India's indirect tax collections in the post-GST period remains somewhat unclear, the ambitious disinvestment and divestment target as well as the modest allocation for bank recapitalization, may pose fiscal risks in FY2018."