According to sources, the central government expects the fiscal deficit to be closer to the revised estimate of 6.9 per cent of GDP for the financial year ended March 31 and take its calibrated shortfall to 4.5 per cent by 2025-26.
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 budget target at the end of February in 2021-22. The government expects to keep it around Rs 15.91 lakh crore for the entire fiscal year 2021-22.
Sources told CNBC-TV18 that the additional Rs 1 lakh crore government expenditure in March was offset by savings made by some departments and the total expenditure is expected to be close 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 revised estimate (RE) for the current year. It was 81.7 per cent of the revised estimate in the corresponding period of last fiscal.
Sources said this year’s LIC IPO proceeds have led to an increase in tax revenue and the overall tax collection is likely to exceed the revised estimate of FY22. “The government has done well in the collection,” said a source.
According to the data released by the Controller General of Accounts (CGA) during April-February FY22, the total net tax receipts stood at Rs 14.81 lakh crore. The total receipts of the government stood at Rs 18.27 lakh crore or 83.9 per cent of the RE of Budget 2021-22. This was 88.2 per cent of the revised estimate for 2020-21 in the corresponding period last year.
Sources said the government is committed to reducing the fiscal deficit to 4.5 per cent by 2025-26. The government has projected the deficit to be reduced to 6.4 per cent of GDP in 2022-23. The fiscal deficit, or the gap between expenditure and revenue excluding borrowings, stood at 76 per cent of the Revised Estimates (RE) for 2020-21 in the previous financial year.
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 due to geopolitical uncertainty and volatile markets. Because of this there was an obstacle. Last month, the government filed the updated draft red herring prospectus for LIC IPO with market regulator SEBI. The IPO-bound insurer reported a net profit of Rs 235 crore in the October-December 2021 quarter, as against Rs 90 lakh in the year-ago period.
In February, a government official had said that it has time till 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 over Rs 60,000 crore to the exchequer.
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