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Finance Ministry states that PM Kisan, GST led to fiscal deficit

The finance ministry recently stated that transitional impact of Goods and Services Tax (GST) and the help given to farmers to manage poor agriculture situations in India in FY 2018-19 prompted the 0.1 point driftin fiscal deficit to 3.4 percent.

As per an official statement on half-yearly survey of the review in receipts and expenditure in connection with the budget toward the end of the financial year 2018-19, while GST was propelled in July 2017 and was in the process of stabilisation , FY 2018-19 was the full financial year after the coming of the GST system.

“Additionally, farmers needed support to manage the changes in the agricultural economy that were underway. The government needed to play a critical and an effectively large role by providing support to farmers to manage these changes to minimize distress in the sector. These reasons necessitated a minor deviation in the fiscal deficit target of the government,” said the finance ministry.

Being a critical year for the government due to elections, the administration had launched Pradhan Mantri Kisan Samman Nidhi or PM Kisan Scheme under which the govt had declared financial support for small scale farmers.

The stated scheme said that small scale farmers who possess under five acres of land will get three installments of Rs 2,000 each consistently or Rs 6,000 every year and was planned for helping 120 million farming families. The plan cost Rs 20,000 crore in 2018-19, and Rs 75,000 crore in 2019-20.

Further, this brought about an increase in use and allocation for the agriculture ministry that rose from Rs 57,600 crore in 2018-19 (BE) to Rs 1.41 lakh crore in 2019-20. The total expenditure was evaluated at Rs 24,57,235 crore in RE 2018-19 contrasted with provisional figure of Rs 23,11,422 crore toward the end of 2018-19. In 2018-19, fiscal deficit was planned at Rs 6,24,276 crore or 3.3 percent of anticipated GDP. It was revised to Rs 6,34,398 crore or 3.4 percent of GDP in RE 2018-19.

Editorial Desk at Agrigate.Global

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