The finance minister P Chidambaram has time and again reiterated that the government will adhere to the fiscal deficit target of Rs 5,42,499 crore or 4.8% of the GDP (gross domestic product). However, the latest set of data fails to re-assure this, given that country’s fiscal deficit, difference between what a government earns and what it spends, stood at Rs 4,12,000 crore ($67.22 billion) during April-September, or 76% of the full-year target.
This is tad higher than the 74.6% reached by August end 2013. A 67% jump in net tax receipts from the previous month helped rein in the deficit in September. While, net tax receipts touched Rs 3,08,000 crore in the first half of the current fiscal year to March 2014, the total expenditure stood at Rs 8,09,000 crore .
Further, as of September-end, the Centre’s Plan expenditure swelled to 42.5% of the budgeted Rs 5.55 lakh crore, against 38.9% in the year-ago period. At Rs 11.11 lakh crore, 51.6% of the estimated non-Plan expenditure of Rs 11.11 lakh crore was incurred by September-end, against 50.7% in the corresponding period a year ago.
However, the catch is that fiscal deficit, excludes substantial portion of oil subsidies, which on inclusion is likely to exceed budget estimates, as oil import bill will be much higher due to depreciation in rupee against the dollar Given this set of data, the government will have to make a significantly efforts to curb its expenditure, if it has to get anywhere close to meeting its fiscal deficit target.
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