Centre’s fiscal deficit more than double FRBM limits
As per the data released by CGA, the fiscal deficit has touched 67.8 per cent of the full-year target at the end of January due to higher expenses and lower revenue realisation by the Centre
Hyderabad: Notwithstanding the tall claims of ‘double-engine’ growth of the BJP leaders to target the Telangana government, the Union government had now admitted that the fiscal deficit of the Central government is running at more than double the level envisaged in the FRBM Act. To plug the gap between revenue expenditure and collections, the Centre has been borrowing from the market.
Union Minister of State for Finance Pankaj Chaudhary had informed the Lok Sabha during last week, that the financial condition of the Union government was in a bad shape and it has decided to freeze three instalments of Dearness Allowance (DA)/ Dearness Relief (DR) to all the Central government employees and pensioners due from March 1 of 2020, July 1 of 2020 and January 1 of 2021.
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He also made it clear that clearing the DA/DR arrears was not feasible as an amount of Rs 34,402.32 crore were utilised to tide over the economic impact of COVID-19 pandemic. “Even now the fiscal deficit of the Government is running at more than double the level envisaged in the FRBM Act,” he informed the Parliament.
As per the data released by the Controller General of Accounts (CGA), the fiscal deficit has touched 67.8 per cent of the full-year target at the end of January due to higher expenses and lower revenue realisation by the Centre. The fiscal deficit in the comparable period of 2021-22 was 58.9 per cent of that year’s Revised Estimate (RE) in the Budget.
In actual terms, the fiscal deficit (gap between expenditure and revenue collection) during the April-January period stood at Rs 11.9 lakh crore. The government borrows from the market to finance its fiscal deficit. For the full year 2022-23, the government expects the deficit at Rs 17.55 lakh crore or 6.4 per cent of the GDP.
While the BJP State leaders have been spreading false reports that the Telangana government was unable to pay salaries to its employees without obtaining loans, the fiscal deficit of Telangana was 3.2 per cent of GSDP, lower than the limit of four percent of GSDP permitted by the Union government. Further, the fiscal deficit for 2023-24 is estimated to be 2.7 per cent of GSDP (Rs 38,235 crore).
