Putting India’s finance minister in a tight spot in the election year, India's fiscal deficit in the first ten months of the 2013/14 financial year crossed the target for the whole year as it touched Rs 5.33 lakh crore during April-January, or 101.6 percent of the full year target, compared with 89.4 percent at the same point a year ago.
In the first ten months of the current fiscal year to March 2014, Net tax receipts stood at Rs 5.76 lakh crore, while total expenditure shot up at Rs 12.7 lakh crore. However, with much of tax collection happening in the last two month of the financial year, revenues are expected to beef up. This accompanied with some aggressive cuts in expenditure by Finance Minister P Chidambaram would ensure India achieves its fiscal deficit target in the election year.
Finance Minister P. Chidambaram, in his interim budget on February 17 speech, revising an earlier target of 4.8 percent, outlined that fiscal deficit would not cross 4.6 percent of GDP. However, this figure was simply seen as government’s clever method of maths, which included carrying forward liabilities from this fiscal to the next, denting the defence expenditure, and silently merging government's welfare schemes and not disclosing the fate of the allocation made to the merged schemes.
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