Fiscal deficit for five months at 75% of Budget estimate

The fiscal deficit for the first five months of 2014-15 is 75 per cent of the Government’s Budget estimate. This trend is similar to what was seen in the corresponding period of last fiscal. According to the latest data of the Controller General of Accounts, fiscal deficit during the April-August period reached ₹3.97 lakh crore, nearly 75 per cent of the budget estimate of ₹5.31 lakh crore.

Fiscal deficit is the difference between the Government’s earnings and expenditure.

Interestingly, the deficit is high even though Plan and non-Plan expenditures have come down in comparison to the corresponding period of the previous fiscal. In fact, the tax receipts are also lower.

Data shows that revenue receipts were 21.7 per cent of the budget estimate in the current fiscal against 23 per cent during corresponding period of the previous fiscal. Similarly, expenditure also came down to 37.5 per cent in comparison to 39.8 per cent of the budget estimate.

The only silver lining is higher non-tax revenue like income from disinvestment, PSU’s dividend and transfer of RBI’s surplus.

The Government has set a target to mobilise over ₹63,000 crore through disinvestment for Central PSUs and its residual stake sale in private companies. But experts point out that the Government has not moved forward and the first nine months of the fiscal has ended.

Commenting on the latest number, DK Pant, Chief Economists with India Ratings, said the present trend is in line with the prevailing industrial growth trend.

“Although a higher payout by the RBI to the Government will have some impact on the fiscal deficit for the full year, overall, the deficit will be governed by industrial growth performance and the Government’s ability to mobilise high disinvestment target, which depends upon capital market conditions,” he added.