North India Statesman
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Often we see in our household budget that if the expenditure exceeds the income, then the borrowing increases. A similar situation is currently being seen in the country’s government treasury figures. The accounts of the first seven months (April to October) of this financial year have come out, and the figures show that the government’s Fiscal Deficit Has grown a little faster than expected.
To understand in simple language, more than half (52.6%) of the debt or deficit that the government had estimated for the entire year has been completed in these first seven months itself. If we talk in rupees then this amount Rs 8.25 lakh crore Has gone beyond. By this time last year, the government had used only about 46% of its quota, which means this time the pace of expenditure is faster.
After all, where is the money going? (Good News vs Bad News)
There are two sides to these figures. On one hand the deficit is increasing, which can be a matter of concern, but on the other hand there is good news also hidden.
government’s ‘Capital Expenditure’ That means the expenditure on development works (roads, bridges, infrastructure) has been quite good. 55% of the budget fixed by the government for the entire year has been spent so far. Last year this figure was only 42%. This simply means that the government is leaving no stone unturned in investing money in development works, which is a good sign for the future.
A little challenge on the earning front
The problem is not in spending but in earning (tax collection). This year the pace of tax earnings has slowed down a bit. While last year by October, more than 50% of the total target tax had been collected, this year it has come down to around 45% only.
Although, Reserve Bank (RBI) Has helped the government a lot this time. The dividend of Rs 2.7 lakh crore received from RBI has managed the situation to a great extent, otherwise the situation could have been more tight.
What are the government and IMF thinking?
The International Monetary Fund (IMF) also has its eyes on India’s books. He has recently said that the impact of the changes in GST and Income Tax remains to be seen. At the same time, the Finance Ministry believes that there is no need to panic. The government is confident that by the end of the financial year they will balance everything and keep the deficit within the target. At present, the government’s emphasis is on maintaining a balance between expenditure and earnings instead of increasing tariffs.
In short, the government is investing lavishly in building the country, but the challenge now is how to get tax collections back on track in the coming months so that the balance sheet does not go deeper into the ‘red mark’.
