New Delhi: The Finance Ministry is believed to have met the revised fiscal deficit target of 3.4 per cent in the last fiscal 2018-19 largely by cutting expenditure, withdrawals from small savings accounts to meet the food subsidy and higher GST collections.
The direct taxe collections fell short by Rs 50,000 crore. The GST collections, however, touched Rs 1.06 lakh crore in March and the gross GST revenues overshot the target of Rs 11.47 lakh crore, which also partly helped adjust for the shortfall on the direct taxes front.
The fiscal deficit had exceeded the full year target for the last fiscal by 34.2 per cent at the end of February. Officials, however, said this is part of a trend of higher expenditures balancing out higher revenues towards the end of the fiscal.
The government might have met the higher food subsidy bill by drawing from small savings to the tune of Rs 30,000-40,000 crore. In the Budget 2018-19, Finance Minister Arun Jaitley had allocated Rs 1.69 lakh crore towards food subsidy, which was increased to Rs 1.71 lakh crore in the revised estimates .
The food subsidy bill was pegged higher in 2018-19 on account of rising procurement costs and the government's decision to keep selling prices unchanged in the National Food Security Act, under which highly subsidised food grains are provided.
The Pradhan Kisaan Samman Nidhi that the government has announced for 2019-20 enabling the farmers to receive Rs 6,000 a year started in the last quarter of 2018-19. The scheme was allocated Rs 20,000 crore for that period. It is, however, now certain that more than half that amount has not been spent owing to the Election Commission's model code of conduct.
The disinvestment target has also been exceeded by Rs 5,000 crore helping the revenue collection. Non-tax revenues like dividends and buybacks also pitched in to keep the fiscal deficit in check.