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Govt spending pace weakens in June, but Q1 expenditure impressive

LiveMint logoLiveMint 03-08-2017 Livemint

The central government’s pace of spending slowed in June 2017. During that month, as the chart shows, total expenditure was Rs1.92 trillion, lower than the Rs2.14 trillion spent in June 2016. A slowdown was more or less inevitable, given the cracking pace at which government expenditure expanded in the first two months of the fiscal year.

For the June quarter as a whole, expenditure was up by Rs1.39 trillion or 27%, from a year ago.

That’s the extra stimulus given to the economy by the central government.

In the June quarter, government expenditure will be a big contributor to gross domestic product (GDP) growth. As the chart shows, both revenue and capital expenditure for Q1 are much higher compared to last year.

That said, a slackening of momentum is on the cards, what with the fiscal deficit already at 80.8% of the full year’s target.

The fiscal deficit was at Rs4.42 trillion for the June quarter compared to Rs3.26 trillion in the year earlier.

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