Fiscal deficit and Controller General of Account

Subject: Economy

Context:

Central government has reported that its fiscal deficit exceeded more than half its Budget Estimate (BE) in the first two months of the current fiscal (FY 20-21)

Concept:

• This was primarily because of a crunch in tax and non-tax revenues and capital receipts. It was 52 per cent for the corresponding period last year.
• According to the Controller General of Accounts, net tax revenue for April-May was 2.1 per cent of the full-year target, compared with 7 per cent a year ago. Non-tax revenue was 2.8 per cent, compared with 9.1 per cent last year, and non-debt capital receipt was 0.4 per cent, as against 2.6 per cent a year ago.

Fiscal deficit

• Fiscal Deficit is the difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure.
• It is an indication of the total borrowings needed by the government.
• A fiscal deficit situation occurs when the government’s expenditure exceeds its income

Controller General of Account

• Controller General of Accounts (CGA), in the Department of Expenditure, Ministry of Finance, is the Principal Accounting Adviser to Government of India and is responsible for establishing and maintaining a technically sound Management Accounting System.
• The Office of CGA prepares monthly and annual analysis of expenditure, revenues, borrowings and various fiscal indicators for the Union Government.
• The Annual Appropriation Accounts (Civil) and Union Finance Accounts are submitted to Parliament under Article 150 of the Constitution.