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

    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?

    Quantum Mutual Fund: Hum woh nahi hain (The Honest Truth)

    Apr 29, 2020

    Ajit Dayal on how the mutual fund industry robs you of your wealth.

    This One Trigger Could Turnaround Yes Bank's Stock Price (The 5 Minute Wrapup)

    Oct 16, 2019

    If Yes Bank manages to do this, it could be the start of a much-needed turnaround for the bank.

    Gold could Hit 40,000 Sooner Than Expected (Profit Hunter)

    Aug 16, 2019

    Domestic gold prices are firing on both engines now. Gold prices could touch 40,000 faster than you could imagine.

    3 Rebirth of India Opportunities Are Racing Ahead in These Gloomy Times... (Views On News)

    Jun 28, 2019

    Tanushree Banerjee shares an update on the Rebirth of India and reveals her top 3 trends...

    More Views on News

    Most Popular

    How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

    Sep 11, 2020

    This is how you can apply the greed and fear cycle in the market to pick stocks.

    Why am I Recommending Caution? (Fast Profits Daily)

    Sep 9, 2020

    This is why I have changed my short-term view on the market.

    Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

    Sep 17, 2020

    This leading household brand will profit big time in a post covid world.

    This Could Be the Best September for Auto Stocks (Profit Hunter)

    Sep 11, 2020

    Here's why I think this month could be a great for auto stocks.


    Covid-19 Proof
    Multibagger Stocks

    Covid19 Proof Multibaggers
    Get this special report, authored by Equitymaster's top analysts now!
    We will never sell or rent your email id.
    Please read our Terms