India Government Finances Apr17 - Nov17

Central Govt. Finances: Apr.-Nov. 2017-18

Highlights:

Total receipts during April- October 2017-18 were at Rs.1292648 cr, (LY: Rs. 1150843 cr), 12.3% rise over the same period last year. It was 60.2% of BE 2017-18. Out of which revenue receipts were at Rs.728768 cr (LY: Rs.697988 cr), 4.4% rise YoY and Capital receipts were at Rs.563880 cr (LY: Rs.452855 cr), 24.5% higher than the last year.

The revenue receipts are not growing as expected and the collections from GST was much below the expectations. To make up the shortfall in revenue receipts, the government has to opt for increasing the capital receipts which had shown a good growth over the previous year.

Gross tax receipt was atRs.973412 cr (LY: Rs.818884 cr), 18.9% growth YoY. Net tax revenue retained by the Central Government was at Rs. 633617 cr, 19.5% higher than the last year and it was 51.6% of the budget estimate for whole year.

Recovery of loans were at Rs.8394 cr, 5.7% higher than the last year.

Total Government expenditure from Consolidated Fund of India was at Rs. 1292648 cr (LY: Rs.1150843 cr), out of which, revenue expenditure was at Rs.1129853 crore (61.5% of BE) and capital expenditure was at Rs. 162795 cr (52.5% of BE).

Revenue Expenditure increased from the previous financial year by 10.1% and Capital Expenditure increased by 30.3%.

Revenue deficit was at Rs. 401085 cr (LY: Rs.327896), 22.3% higher than the last year and it was 125% of total budget estimate. This is an area of concern.

Fiscal deficit was at Rs.525321 cr(LY: Rs.423507 cr), 24% higher than the same period last year and it was at 96.12% of BE. Considering that another , four months to go , this will far exceed the budget.

Primary deficit was at Rs.267412 cr, 35.9% rise YoY. It was 1140% of BE.

Eight core infrastructure industries grew by 4.7 per cent in October 2017, as compared to 7.1 per cent in October 2016. The growth of these industries during April-October 2017 was 3.5 per cent, as compared to 5.6 per cent during the corresponding period of previous year. In Dec, there was traction and the expectations are that , the growth rate will rise. The forecast by various international and domestic agencies indicate that the growth going for ward will pick up.

Foreign exchange reserves stood at US$ 400.7 billion as at end of 24^thNovember 2017 as compared to US$ 370.0 billion at end March 2017.

The growth rate of IIP in Oct. 2017 was at (+) 2.2 percent. During Apr- Oct.17 the overall IIP contracted by 2.5percent compared to growth of 5.5 per cent during same period last year.

Foreign trade: Merchandise exports and imports increased by 30.5 per cent and 19.6 per cent respectively in US$ terms in Nov. 2017 over Nov. 2016. During Nov. 2017, oil imports increased by 39.1 per cent and non-oil imports increased by 14.6 per cent respectively over Nov. 2016.

Balance of Payments: India’s current account deficit (CAD) at US$ 22.2 billion (1.8 per cent of GDP) in H1 of 2017-18 increased from US$ 3.9 billion (0.4 per cent of GDP) in H1 of 2016 -17. During the H1 of 2017-18, the net invisibles balance (invisible receipts minus invisible payments) was US$ 52.5 billion as compared to US$ 45.7 billion in the corresponding quarter of 2016-17. Net FDI inflows during H1 of 2017-18 moderated to US$ 19.6 billion compared to US$ 20.8 billion in H1 of 2016-17. Portfolio investment recorded a net inflow of US$ 14.5 billion during H1 of 2017-18 as compared with US$ 8.2 billion in H1 of 2016-17. Net capital flows remaining higher than the CAD, there was net accretion to India’s foreign exchange reserves (on BoP Basis) to the tune of US$ 20.9 billion in H1 of 2017-18 as compared with US$ 15.5 billion in H1 of 2016-17

External Debt: India’s external debt stood at US$ 495.7 billion at end-September 2017, recording an increase of 5.1 per cent over the level at end-March 2017. Long-term debt was US$403.0 billion at end-September 2017 as compared to US$ 383.9 billion at end-March 2017.

Short-term external debt was US$ 92.7 billion at end-September 2017, as compared to US$ 88.0billion at end-March 2017.

As per the estimates of Gross Domestic Product (GDP) for the second quarter (July-September) 2017-18, released by the Central Statistics Office (CSO), the growth rate of GDP in Q2 wasat 6.3 per cent as compared to the growth of 7.5 per cent in Q2 of 2016-17.