Despite muted tax collections, the Centre is expected to make a marginal improvement in its targetted fiscal deficit of 4.1 per cent of the GDP in 2014-15 on the back of revenue from spectrum as well as internal savings.
“It could be a notch better by a few basis points at about 4.07 per cent of the GDP to 4.09 per cent as against the target of 4.1 per cent,” said a senior government official, warning that the final data would take some more time to be collated.
Final accounts for 2014-15 are expected to be released by the Controller General of Accounts in May 2015. But even a partial lowering of the fiscal deficit could give a big boost to the Centre, which has decided to delay its fiscal consolidation roadmap by a year. The fiscal deficit target for 2015-16 has been kept at 3.9 per cent.
The Centre had budgeted about Rs 13,000 crore as non-tax revenue from auction of telecom spectrum in 2014-15. “The over Rs 1 lakh crore from spectrum auction will be a windfall next fiscal as well,” said the official.
It also expects some more internal savings to the tune of at least Rs 25,000 crore on the back of spending curbs in the last quarter as well as the last month of the fiscal. The Centre had cut down its expenditure bill by over Rs 1 lakh crore in the revised estimate to Rs 1681158 crore.
Low global crude oil prices are also expected to help the Centre keep its fuel subsidy bill in check though tax revenues are likely to trail behind and just about meet the revised estimate of Rs 9,08,463 crore.
“It is quite possible that there is a very slight improvement in the fiscal deficit due to the spectrum auction and expenditure cuts. But tax collections have been weak,” said DK Joshi, chief economist, Crisil.