As Finance Minister Arun Jaitley delivers his budget speech on February 1, the world markets will be watching the fiscal deficit projection, which will show how wisely the government spends its money.
Fiscal deficit is the amount by which India’s government expenses exceed the receipts. Higher the deficit, the government borrows that much more to meet its expenses. As in any household, even the government is expected to spend wisely and keep its debt in check.
However, successive governments in India have doled out far more than they should have. An annual target for fiscal deficit is spelt out and exceeded every time. And even the final number hides a lot more than it reveals.
The lack of transparency is a charge that has come from none other than the government auditor. “Audit noticed lack of transparency/mismatches in disclosure of deficit figures in Budget at a Glance and Annual Financial Statements,” a January 2018 report from the Comptroller and Auditor General of India said.
Untold tax refunds
Taxpayers often pay more than they ought to and get refunds after filing returns. This number has been increasing every year. As the CAG noted, “Though a significant amount of the gross direct tax collected in the relevant year is refunded in subsequent years, Government Finance Accounts do not include this.”