India's fiscal deficit moderates, touches nearly 79% of estimates

New Delhi: Government’s fiscal deficit touched 78.8 percent of the budget estimates (BE) in the nine months to December 2012. The is a slight improvement, since the percentage in the first eight months was 80.4.

In absolute terms, the fiscal deficit or gap between expenditure and revenue receipts stood at Rs 4,04,699 crore at the end of December 2012, according to the data released by Controller General of Accounts (CGA) today. Government has estimated the fiscal deficit for 2012-13 at Rs 5,13,590 crore.

[caption id=“attachment_609684” align=“alignleft” width=“380”] The finance minister had said the deficit would be cut 0.6 per cent every year for the next five years. For FY14, it is to be budgeted at 4.8 per cent of GDP, to ultimately reduce to three per cent of GDP by 2016-17. Reuters[/caption]

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The fiscal deficit in the first nine months of current financial year, however, is lower than that of 92.3 percent of the budget estimates (BE) in the same period of previous fiscal.

The improvement on the fiscal deficit front in comparison to the same period a year ago is attributed to government’smeasures of rationalisation of expenditure including 10 percent mandatory cut on non-plan expenditure.

Besides, steps have been taken to cut the subsidy outgo on petroleum products. The expenditure during the period was 66.5 percent of BE as against 71.3 percent in April-December of the last fiscal.

The government has rolled out the fiscal deficit road-map for the 12th five year plan. It estimates fiscal deficit to come down to 3 per cent of the GDP by 2016-17. For the current year, the deficit is estimated at 5.3 per cent, up from earlier estimate of 5.1 percent.

Government bridges its fiscal deficit through market borrowings. The CGA data revealed that during April-December 2012, the revenue receipts stood at Rs 5,70,536 crore or 61 percent of the BE. The performance on revenue mop up front during the period at 61 per cent of BE was lower than 63.1 percent achieved during April-December 2011. Government is eyeing Rs 935,685 crore revenue this fiscal. Tax collection (Rs 4,84,156 crore) slipped to 62.8 percent of BE as compared to 63.3 per cent achieved in the same period last year.

Government receipts during the period totalled Rs 5,86,424 crore while the expenditure worked out at Rs 9,91,123 crore.

PTI