India's fiscal deficit has surpassed the annual target within the first 7 months of the year

[GS Zhou]

HIGHLIGHTS

• India's fiscal deficit in the first seven months through October stood at Rs 7.2 trillion
• It is 102.4 per cent of the budgeted target for the entire current fiscal year
• Govt's revenue in this period was Rs 9.3 trillion and expenditure Rs 16.55 trillion

The government of India's fiscal deficit has surpassed the annual target within the first seven months of the current financial year. India’s fiscal deficit in the first seven months through October stood at Rs 7.2 trillion ($100.32 billion), or 102.4 per cent of the budgeted target for the current fiscal year, government data showed on Friday.

According to government data, the net tax receipts in the April-October period was Rs 6.83 trillion, while total expenditure was Rs 16.55 trillion.

The total revenue government received in the period was Rs 9,34,460 crore, which included Rs 6,83,486 crore in tax revenue, Rs 2,24,148 crore in non-tax revenue, Rs 26,826 crore in non-debt capital receipts.

Non-debt capital receipts also include Rs 9,461 crore worth of loan recovery.

Disinvestment proceeds have contributed Rs 17,365 crore to the final revenue figures.

Total expenditure incurred by the government of India in April-October 2019 period is Rs 16,54,905 crore, out of which Rs 14,53,632 crore is on Revenue Account and Rs 2,01,273 crore is on Capital Account.

Out of the total revenue expenditure, Rs 2,89,565 crore was on account of interest payments while Rs 2,26,724 crore was on account of major subsidies.

Rs 3,66,871 crore has been transferred to state governments as devolution of share of taxes by the Centre. It is Rs 10,205 crore lower than the previous year.

https://www.indiatoday.in/business/...llion-annual-fiscal-target-1623757-2019-11-29

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How can the Indian government spending be almost 2x of the government revenue? How does it work?

 

[GumNaam]

So...I guess when modi said "make on india", he meant "make CHOOTIA in india"!

HIGHLIGHTS

• India's fiscal deficit in the first seven months through October stood at Rs 7.2 trillion
• It is 102.4 per cent of the budgeted target for the entire current fiscal year
• Govt's revenue in this period was Rs 9.3 trillion and expenditure Rs 16.55 trillion

The government of India's fiscal deficit has surpassed the annual target within the first seven months of the current financial year. India’s fiscal deficit in the first seven months through October stood at Rs 7.2 trillion ($100.32 billion), or 102.4 per cent of the budgeted target for the current fiscal year, government data showed on Friday.

According to government data, the net tax receipts in the April-October period was Rs 6.83 trillion, while total expenditure was Rs 16.55 trillion.

The total revenue government received in the period was Rs 9,34,460 crore, which included Rs 6,83,486 crore in tax revenue, Rs 2,24,148 crore in non-tax revenue, Rs 26,826 crore in non-debt capital receipts.

Non-debt capital receipts also include Rs 9,461 crore worth of loan recovery.

Disinvestment proceeds have contributed Rs 17,365 crore to the final revenue figures.

Total expenditure incurred by the government of India in April-October 2019 period is Rs 16,54,905 crore, out of which Rs 14,53,632 crore is on Revenue Account and Rs 2,01,273 crore is on Capital Account.

Out of the total revenue expenditure, Rs 2,89,565 crore was on account of interest payments while Rs 2,26,724 crore was on account of major subsidies.

Rs 3,66,871 crore has been transferred to state governments as devolution of share of taxes by the Centre. It is Rs 10,205 crore lower than the previous year.

https://www.indiatoday.in/business/...llion-annual-fiscal-target-1623757-2019-11-29

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How can the Indian government spending be almost 2x of the government revenue? How does it work?

it's called layers upon layers upon layers of corruption & ineptitude.

 

[Manidabest]

good for them

 

[GHALIB]

that is worrisome .

 

[The Accountant]

what is the expected deficit in terms of % of GDP?

With Original estimate of 3.3% and going with the current pace, it is likely to be closed to 6%.

 

[crankthatskunk]

It is clear that the Indians are going the way of the USA.

With one exception, they don't have fiat currency like dollar to support them.
Neither they have power to subdue the world with power to keep the dollar as world trading currency.
The end would be disastrous for India. And in the longer run for USA too, when China is too big for them, and they would lose the control of the world and Dollar becomes what it is a paper, fiat currency.
Not long to go.

 

[maximuswarrior]

Modi has not only raped his women, but also the economy.

 

[crankthatskunk]

Economic situation in India is far from rosy, apart from fiscal deficit, the trade deficit is also widening.

India's overall trade deficit, including both goods and servicesNSE -0.36 %, has increased to USD 103.63 billion in 2018-19 from USD 84.45 billion in the previous financial year.

Trade deficit with Korea, Japan, Germany, Iraq and Saudi Arabia increased to USD 12 billion, USD 7.9 billion, USD 6.25 billion, USD 20.58 billion and USD 22.9 billion, respectively, in 2018-19.

 

[Quibbler]

HIGHLIGHTS

• India's fiscal deficit in the first seven months through October stood at Rs 7.2 trillion
• It is 102.4 per cent of the budgeted target for the entire current fiscal year
• Govt's revenue in this period was Rs 9.3 trillion and expenditure Rs 16.55 trillion

The government of India's fiscal deficit has surpassed the annual target within the first seven months of the current financial year. India’s fiscal deficit in the first seven months through October stood at Rs 7.2 trillion ($100.32 billion), or 102.4 per cent of the budgeted target for the current fiscal year, government data showed on Friday.

According to government data, the net tax receipts in the April-October period was Rs 6.83 trillion, while total expenditure was Rs 16.55 trillion.

The total revenue government received in the period was Rs 9,34,460 crore, which included Rs 6,83,486 crore in tax revenue, Rs 2,24,148 crore in non-tax revenue, Rs 26,826 crore in non-debt capital receipts.

Non-debt capital receipts also include Rs 9,461 crore worth of loan recovery.

Disinvestment proceeds have contributed Rs 17,365 crore to the final revenue figures.

Total expenditure incurred by the government of India in April-October 2019 period is Rs 16,54,905 crore, out of which Rs 14,53,632 crore is on Revenue Account and Rs 2,01,273 crore is on Capital Account.

Out of the total revenue expenditure, Rs 2,89,565 crore was on account of interest payments while Rs 2,26,724 crore was on account of major subsidies.

Rs 3,66,871 crore has been transferred to state governments as devolution of share of taxes by the Centre. It is Rs 10,205 crore lower than the previous year.

https://www.indiatoday.in/business/...llion-annual-fiscal-target-1623757-2019-11-29

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How can the Indian government spending be almost 2x of the government revenue? How does it work?

This is quite close to normal. India receives most of its direct tax collections in the latter half of the fiscal year, mostly jan - march

 

[GS Zhou]

This is quite close to normal. India receives most of its direct tax collections in the latter half of the fiscal year, mostly jan - march

I'm not an expert on the Indian fiscal topic. It would be very helpful, if you could share the historical tax collection data by quarterly, to show that to what an extent is "India receives most of its direct tax collections in the latter half of the fiscal year, mostly jan - march"

 

[PakSword]

How can the Indian government spending be almost 2x of the government revenue? How does it work?

Other than tax, the inflows include short and long term borrowings. The current outflows are planned ahead, the effects of current situation will be reflected in a years time.

There are multiple options for governments which find themselves in this situation:

1 - Increase taxes and duties
2 - Decrease spending
3 - Remove subsidies

If people stop spending money, increasing taxes proves as a double edge sword. You can't squeeze businesses when the economy is already slow as it forces the businesses to shut down and move elsewhere in the region.

Lowering the expenditure means that people lose jobs because of cancelled projects.. Again, this doesn't result in a better situation, actually far from it. People losing jobs means further decrease in revenue collection.

Removing subsidies have direct impact on certain businesses, and the general population also gets a hit. For example, if there's a subsidy on electricity for certain industries to support them, removing the subsidies of course will have a reverse effect.

Viable options for government are to take loans, and decrease the value of currency to support inflows from elsewhere.. But decreasing value of currency means imports will become expensive and again the industries will get a direct hit.

So the easiest option is to get short and long term loans..

Expect Indian government to borrow money from the central bank soon.

 

[Type59]

State budgets are in very bad shape. Too many freebies during election years.

 

[Indos]

Economic situation in India is far from rosy, apart from fiscal deficit, the trade deficit is also widening.

India's overall trade deficit, including both goods and servicesNSE -0.36 %, has increased to USD 103.63 billion in 2018-19 from USD 84.45 billion in the previous financial year.

Trade deficit with Korea, Japan, Germany, Iraq and Saudi Arabia increased to USD 12 billion, USD 7.9 billion, USD 6.25 billion, USD 20.58 billion and USD 22.9 billion, respectively, in 2018-19.

WOW thats huge, understandable that Indian doesnt want to join FTA with ASEAN and China. @Nilgiri Your opinion please

 

[GS Zhou]

Expect Indian government to borrow money from the central bank soon.

I saw the news that the Indian government has got a one-time big dividend (1.76 trillion Rupee) from RBI in August this year. But even though, the government revenue is still shorter than the budget plan.

To my knowledge, the central bank should be a Nonprofit organization. But it looks that RBI is operating as a commercial bank and earning the profits for the shareholder. Very curious to know how the system works in India.
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https://www.cnbc.com/2019/08/28/ind...illions-of-its-surplus-to-the-government.html
India’s central bank handed over billions to the government. Here’s how they may spend it
PUBLISHED WED, AUG 28 20192:51 AM EDTUPDATED WED, AUG 28 20194:43 AM EDT

Saheli Roy Choudhury

KEY POINTS

• India’s government is set to receive a windfall from the central bank, but analysts say there is limited scope to spend all that money.
• The government will likely opt to use the windfall to plug a predicted “shortfall in its budgeted tax revenues,” instead of funding additional spending plans or scaling back on full-year borrowings, according to them.
• The Reserve Bank of India’s central board on Monday said the central bank will transfer 1.76 trillion rupees (about $24.6 billion) as dividend to New Delhi for the year that ended on June 30, 2019, higher than what the market had been expecting.

The Reserve Bank of India said Monday the central bank will transfer 1.76 trillion Indian rupees (about $24.6 billion) as dividend to New Delhi for the year that ended on June 30, 2019. That was higher than what the market had been expecting.

The RBI follows a 12-month period that runs from July to June and pays an annual dividend to the government based on its profits. Dividend is a sum of money paid annually by a company or a bank to its shareholders out of its profits.

Last year, the RBI board formed a committee to look into how much the central bank should hold in its reserves amid a push from the government to access the surplus for stimulus packages.

This week’s move from the central bank could provide Prime Minister Narendra Modi’s government with some breathing room. However, the move by the government to dip into central bank reserves in order to fund fiscal deficits has received wide criticisms.

On one hand, India needs policies to help prop up growth, which has slowed considerably in recent quarters. On the other hand, it needs to maintain the 3.3% fiscal deficit target set for the current year — or risk denting investor confidence in India.

The government had budgeted for around 900 billion rupees as dividend from the RBI for the year ending March 31, 2020, Citi analysts wrote in a note on Monday.
Taking into account the interim dividend that the central bank has already paid, the government is set to make additional gains of about 576 billion rupees, or approximately 0.3% of the GDP, according to calculations done by the Citi analysts. They explained that Monday’s announcement is a one-time “excess capital” and removes the possibility of such large transfers over the next several years.

In early July, India’s former Finance Secretary Subhash Chandra Garg said that the government expects 900 billion rupees as dividend from the RBI in the current fiscal year, according to local media reports.

What the RBI payout may be used for
Analysts said this week the government will likely opt to use the dividend to plug a predicted shortfall in its budgeted tax revenues, instead of funding additional spending plans or scaling back on full-year borrowings.

The RBI “has been asked to rescue the Indian government by helping it to meet the financial obligations tied to the recently announced policy measures (along with its budgetary ambitions) aimed at jumpstarting the country’s stalling economy,” Kunal Kundu, India economist at Societe Generale, wrote in a Tuesday note.

Last week, India outlined a raft of measures to boost sentiment in the economy — many were expecting the government to announce new spending plans instead. Kundu said last week’s policy measures will not likely provide much of a boost to the stalling economy, and its impact will be “marginal at best.”

“While there are reports that the government may use this surplus to declare additional fiscal stimulus in reaction to sagging growth, we believe the space for this is limited,” Sonal Varma and Aurodeep Nandi from Nomura wrote in a Monday note.

“The current fiscal deficit target of 3.3% of GDP is contingent on relatively aggressive assumptions on tax collections and higher nominal GDP growth than what may actually be realised,” they said, adding that in a weak growth environment, there could be a shortfall of about 1 trillion rupees — or 0.5% of GDP — in tax revenues.

“Thus gains from excess RBI dividends are likely to be utilized to bridge the revenue shortfall rather than engage in stimulus measures,” Nomura said in the note.

The RBI’s news release did not specify the exact timing of the dividend transfer to the government.

If it is an immediate cash transfer, where New Delhi uses part of the money to settle unpaid claims and goods and services tax refunds, then the liquidity in the system will improve further, Citi analysts Samiran Chakraborty and Baqar M Zaidi said in their note.

As a result, they said, it could reduce the central bank’s need to carry out open market operations to improve liquidity in the latter half of the fiscal year. Open market operations refer to the buying and selling of government securities in the market by central banks and are considered to be one of the tools to achieve monetary policy objectives.

 

[Mista]

India’s fiscal deficit in the first seven months through October stood at Rs 7.2 trillion ($100.32 billion)

The total revenue government received in the period was Rs 9,34,460 crore

That's lower than Switzerland's government revenue lol.

https://tradingeconomics.com/switzerland/government-revenues