The country’s fiscal deficit has exceeded more than half the year’s budgeted total in the first four months of the current fiscal itself. Fiscal deficit is gap between the Government’s revenue and expenditure.
According to the Controller General of Accounts (CGA), fiscal deficit during April-July stood at Rs 2.64 lakh crore, which is 51.5 per cent of the Budget estimates.
However, the situation seems to be slightly better than last year when it was 55.4 per cent of the Budget estimate in the first four months.
This slight improvement is mainly on account of some tightening on the expenditure front and higher growth in revenue collections.
The Government’s revenue collections increased by 18 per cent in April-July 2012 compared with 17.4 per cent in the corresponding period last year. On the other hand, increase in expenditure was marginally lower at 29.3 per cent (29.8 per cent).
The high fuel subsidy outgo is one of the major reasons for the ballooning fiscal deficit. The Government intends to bring down the fiscal deficit, which touched 5.76 per cent of the GDP in the last fiscal, to 5.1 per cent of the GDP or Rs 5.13 lakh crore this year by cutting down on its subsidy bill.
Amid concerns over high fiscal deficit, the Government has appointed an expert panel to formulate a fiscal consolidation roadmap.