Finance Minister Arun Jaitley on Thursday projected a higher fiscal deficit of 3.5 per cent of the GDP for 2017-18, as against the target of 3.2 per cent, on account of GST implementation and deferment of spectrum auction.
The fiscal deficit or gap between total expenditure and revenues has been pegged at 3.3 per cent as against FRBM mandate of 3 per cent.
As per the revised estimates presented by Jaitley in the Union Budget 2018-19, the net borrowing for the current fiscal was raised steeply to Rs 4.79 lakh crore as against the estimate of Rs 3.5 lakh crore.
The Government will borrow Rs 4.07 lakh crore from the market in 2018-19, around Rs 73,000 crore lower than the current fiscal.
Referring to public finances, Jaitley said that in 2017- 18, the Central Government will be “receiving GST revenues only for 11 months, instead of 12 months.This will have fiscal effect,” he said.
There has also been some shortfall in non-tax revenues on account of certain developments, including deferment of spectrum auction, he added.
A part of this shortfall has been made up through higher direct tax revenues and bigger disinvestment receipts, Jaitley said. “Revised fiscal deficit estimates for 2017-18 are Rs 5.95 lakh crore at 3.5 per cent of GDP,” he announced.
As per the budget document, total revised estimates for expenditure in 2017-18 are Rs 21.57 lakh crore (net of GST compensation transfers to the states) as against the Budget Estimates (BE) of Rs 21.47 lakh crore. later, at a press conference, Revenue Secretary Hasmukh Adhia said GST revenue collection will fall short by Rs 50,000 crore.
Jaitley further said in order to impart unquestionable credibility to the Government’s commitment for the revised fiscal glide path, he would be accepting key recommendations of the Fiscal Reform and BudgetManagement Committee. The recommendations relate to adoption of the debt rule and to bring down the central Government’s debt to GDP ratio to 40 per cent.
“Government has also accepted the recommendation to use fiscal deficit target as the key operational parameter,” Jaitley said.