The central government’s fiscal deficit stood at Rs 5.41 lakh crore in April-August, accounting for 32.6% of the full-year target, according to data released by the Controller General of Accounts on September 30.

The fiscal deficit for April-August 2021 stood at Rs 4.68 lakh crore, or 31.1% of the budgeted target for the fiscal year 2021-22 target.

Accordingly, the fiscal deficit in April-August of the current financial year is 15.7% higher on a year-on-year basis.

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The centre is targeting a fiscal deficit of Rs 16.61 lakh crore for the financial year 2022-23, or 6.4% of GDP.

In February, while presenting the annual budget, Finance Minister Nirmala Sitharaman set the fiscal deficit target at 6.4% of GDP for 2022/23 starting April, compared to 6.7% in the previous financial year.

In August, the Centre’s net tax receipts fell 70.7% year-on-year to Rs 33,882 crore, while non-tax revenue surged 213.2% to Rs 27,221 crore. This caused total receipts to decline 50% to Rs 62,511 crore.

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Total expenditure decreased by 3.3% in August to Rs 2.63 lakh crore, while capital expenditure gained 0.5% from last year to Rs 43,658 crore.

For the April-August period, total receipts rose 4.9% year-on-year to Rs 8.48 lakh crore, accounting for 37.2% of the budget target. Net tax revenue rose 8.6% year-on-year to around Rs 7 lakh crore, accounting for 36.2% of the budget target.

While total expenditure was Rs 13.9 lakh crore or 35.2% of the full year target, the data showed. 

Despite the widening fiscal deficit, the Centre’s finances continue to look in good shape.

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What is Fiscal Deficit?

Fiscal Deficit refers to the difference between total revenue and total expenditure of the government. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.

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The gross fiscal deficit (GFD) is the excess of total expenditure including loans net of recovery over revenue receipts (including external grants) and non-debt capital receipts. The net fiscal deficit is the gross fiscal deficit minus net lending of the Central government.