Amid rising concerns over the widening fiscal deficit, Finance Ministry notified that fiscal position of the government is likely to improve during January-March quarter on the back of possible pick up in tax revenue realisation, receipts from spectrum auction and stake sale of PSUs. Finance Ministry stressed that fiscal deficit is not still an issue as 50 percent of the tax revenue usually comes in the fourth quarter.
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. During the reported period, 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. The 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. Gross tax collections since April have grown 14% year-on-year, however, net tax collections have been lower than estimated on account of refunds. 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.
The government targets to trim the fiscal deficit to 4.1% of gross domestic product (GDP) in FY15. It has recently issued new austerity measures including 10% cut in non-Plan expenditure. Moreover, the government had also put in place a fiscal consolidation roadmap as per which the fiscal deficit has to be brought down to 3% of the GDP by 2016-17.