The Government may revise the fiscal deficit target in the mid-year economic review. This review will be tabled in the Parliament during the winter session starting from November 22.

The Finance Ministry has set a fiscal deficit target of 4.6 per cent of the gross domestic product (GDP) for 2011-12. But according to latest data from the Controller General of Accounts, it has already reached over 70 per cent in first six months of this fiscal.

A senior Government official said, “There is some thinking on revising the deficit number, but nothing has been finalised yet.” But he was confident that the deficit will not exceed 5 per cent.

Although the Government has managed to keep a check on the expenditure, the problem is with the revenue. CGA figures say that for the first six months, Plan expenditure has been only 40.3 per cent and non-Plan expenditure 51.6 per cent. But total receipts have been just 36.3 per cent of the Budget estimate.

The official said that final picture for the mid-year review will emerge when tax collections for October and estimates of economic growth for the second quarter ending September come out. The Government will release the estimate on November 30.

Meanwhile, Crisil on Monday said that the deficit could reach 5.2 per cent and Citi in its flash report on India Macro, released on Tuesday, said, “Given trends in revenues and expenditures, we maintain our view of a minimum slippage in the deficit to 5.1 per cent of GDP. This could rise to 5.8 per cent if the Government does not defer the under-recoveries payment to the oil companies.”

Citi pointed out expenditure slippage on two counts. First it is about oil subsidies. It estimated that if crude oil averages $100/barrel during the second half of the year, the Government's subsidy burden could be Rs 63,200 crore.

However, crude oil rising to an average of $105/barrel could take the share higher to Rs 68,100 crore.

>Shishir.s@thehindu.co.in

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