In a big sign of disappointment to the central government, India’s fiscal deficit widened to 99% at Rs 5.25 lakh crore during April-November this fiscal as against Rs 5.31 lakh crore Budget Estimates for 2014-15. In the corresponding year-ago period, fiscal deficit, gap between government expenditure and revenue, was 93.9% of the budget estimate.
During the reported period, government's net tax revenue was Rs 4.13 lakh crore or 42.3% of the Rs 9.77 lakh crore estimated for the whole year. Total receipts including revenue and non-debt capital during the eight months of the year was Rs 5.49 lakh crore or 43.4% of the target. Prevailing slowdown in manufacturing sector is adversely impacting the tax collection, which is the major source of revenue for the government. On the other hand, Plan expenditure of the government during the period was Rs 2.93 lakh crore or 51.1% of target and non-Plan expenditure was Rs 7.8 lakh crore or 64 % of the target. The fiscal deficit was recorded at around Rs 5.08 lakh crore or 4.5% of GDP in FY14 as against 4.9% in FY13.
With an aim to trim the fiscal deficit to 4.1% of gross domestic product (GDP) in FY15, the government has recently issued new austerity measures including 10% cut in non-Plan expenditure. The government barred senior officials from first-class air travel, foreign jaunts, holding meetings in five-star hotels and purchase of new cars. Moreover, it had also put in place a fiscal consolidation roadmap as per which the fiscal deficit has to be brought down to 3 per cent of the GDP by 2016-17.