Central Govt: Improving fiscal health? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Central Govt: Improving fiscal health?

Oct 1, 2001

The central government’s fiscal performance in the first five months of the year is disappointing in the least. Fiscal deficit, a key indicator of the government's profligacy, has been put at Rs 560 bn (48% of budgeted). However, a closer look at the government's performance in August paints an interesting picture. A turnaround cannot be termed as a trend. And this is what needs to be kept in mind while evaluating the government’s performance for the month of August. The Central Government, which has been consistently posting a widening of the deficit since the start of the fiscal year, posted a fiscal surplus of Rs 25 bn in August!

  • More on the government’s fiscal health

    How did the government achieve this? First, the government managed to limit the increase in non-plan expenditure to just 2% during the month. Second, plan expenditure, unfortunately though, declined by over 5%. These two developments resulted in a near zero growth in total expenditure in August.

  • More on the government’s performance on the expenditure front

    On the revenue front, the growth in net tax revenues continued to disappoint. However, non tax revenues recorded a sharp growth, resulting in an over 8% growth in revenues in August. This coupled with a Rs 24 inflow from recovery of debt, resulted in a the government posting a fiscal surplus.

  • More on the government’s performance on the revenue front

    The fiscal position of the government continues to be precarious, notwithstanding the improvement in the month of August. There is an urgent need for the government to take stern measure to curtail expenditure and shore up revenues. However, in view of the global slowdown, achieving these objectives will become even more difficult.

  • Equitymaster requests your view! Post a comment on "Central Govt: Improving fiscal health?". Click here!


    More Views on News

    These Stocks Have Rallied Over 300% In the Last 12 Months. Is the Rally Justified? (Views On News)

    Nov 12, 2021

    As many as 150 stocks from the BSE 500 index deliver multibagger returns in the past one year.

    Ultimate Guide to Hedging Your Portfolio (Fast Profits Daily)

    Sep 21, 2021

    How can you protect your portfolio in a market crash? Find out in this video.

    Ride the Indian Real Estate Revival with this 'Different' Smallcap Stock (Profit Hunter)

    Mar 23, 2021

    Affordability in the housing segment has never been so good in last one and a half decade. Here's how you could make the most of it...

    My Latest Stock Recommendation (Fast Profits Daily)

    Oct 9, 2020

    How I picked an exciting stock using trends from both the commodity and equity markets.

    Data is the New Oil but It's Also the New Sugar. Here's How to Fight it (Profit Hunter)

    Jun 1, 2020

    Is too much data hurting your quest for market beating returns?

    More Views on News

    Most Popular

    Infosys vs TCS: Which is Better? (Views On News)

    Nov 26, 2021

    In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

    This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

    Nov 24, 2021

    Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

    6 Popular Stocks that Turned into Penny Stocks (Views On News)

    Nov 27, 2021

    A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

    How to Find Your Next 10-Bagger in this Market (Profit Hunter)

    Nov 19, 2021

    The #1 make or break factor in your portfolio you shouldn't ignore.

    MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

    Nov 20, 2021

    The Rs 19 bn issue is set to hit the market soon.


    Become A Smarter Investor
    In Just 5 Minutes

    Multibagger Stock Guide 2022
    Get our special report Multibagger Stocks Guide (2022 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms