Bikky Khosla | 05 Jun, 2018
relief, the government has broadly
met its fiscal deficit target of 3.5 percent for the financial year
2017-18. According to provisional data released by the Controller
General of Accounts (CGA), fiscal deficit for the period stood at
3.53 percent of the country's Gross Domestic Product. It reached Rs
5.91 lakh crore as against the revised estimates of Rs 5.94 lakh
crore. In budget 2018-19, the target was revised to 3.5 percent from
3.2 percent, and now it is a pleasant surprise that the revised
target is almost achieved.
deficit for the April-February period had stood at 120 percent of the
revised estimate. Similarly, revenue deficit and primary deficit for
the period had stood at 119 percent and 414 percent of the revised
FY18 target. There was pressure on the government due to
implementation of the Goods and Services Tax. In the background of
this, it looked like the government may not be able reach the deficit
target even after the revision, but factors like rise direct tax,
non-tax revenues, expenditure savings and disinvestment helped
contain the deficit.
India's Gross Domestic Product registered 7.7 percent growth during
the January to March quarter, against China's 6.8 percent growth
for the period, enabling the economy to again retain its position as
the fastest growing major economy. This is the fastest
pace of growth
in seven quarters. This is again encouraging. Nobody
anticipated such an extent of growth. However,
for the whole fiscal year that ended March 31, growth slipped to
6.7 percent, down from 7.1
percent in 2016-17.
what explains the spike in fourth-quarter GDP growth? The government
claims that the growth indicates turnaround in manufacturing and
construction activity and pick up in private investments. The data
shows a robust 9.1 percent growth in manufacturing, compared with 6.1
percent a year ago. The farm and services sectors also did well.
However, a recent report pointed out that it was only "the hand
of government" that lifted GDP growth. Additionally, exports and
private consumption also disappointed. These aspects demand attention
invite your opinions.