Economy grows at 7.4 pc in 2009-10; 8.6 pc in Q4

Even as the economy grew by a better-than-estimated 7.4 per cent in 2009-10,fiscal deficit for the year stood at 6.6 per cent of the GDP

Even as the economy grew by a better-than-estimated 7.4 per cent in 2009-10,fiscal deficit for the year stood at 6.6 per cent of the GDP,only slightly lower than the estimated 6.7 per cent in the budget.

Fiscal deficit is the difference between total receipts and expenditure of the government. As per the Controller General Accounts of India data,the deficit as on March 31,2010,stood at Rs 4,12,307 crore,6.61 per cent of GDP at Rs 62,31,171 crore,which was also released today.

The deficit had grown to over 6 per cent in 2008-09 on increased public spending and tax cuts provided by the government to boost up the economy facing the ripples of global slowdown.

Tax collection by the government during the last year was not as robust as provided in the revised estimates. Also,the plan expenditure as was shown in the Budget,could not be met.

The government spent Rs 3.02 lakh crore under the plan expenditure against Rs 3.15 lakh crore shown in the revised estimates. It received Rs 4.59 lakh crore against Rs 4.65 lakh crore given in revised estimates.

Non-tax receipts stood at Rs 1.16 lakh crore,or 103.4 per cent of the actual estimates in 2009-10,as compared to Rs 100.8 per cent in 2008-09.

Total expenditure stood at Rs 10.19 lakh crore,or 99.7 per cent of the 2009-10 revised estimates,as compared to 98.1 per cent in 2008-09. The expenditure was slightly lower than the revised target of Rs 10.21 lakh crore in 2009-10.

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The government borrowed over Rs 4.01 lakh crore from the market and raised money thorough provident funds and national small savings fund to finance the deficit.

Finance secretary Ashok Chawla said on Monday that fiscal consolidation was a focus area for the government,though,the current fiscal’s borrowing is expected to remain unchanged.

The government seeks to bring down the fiscal deficit to 5.5 per cent in the current year and plans to borrow Rs 4.57 lakh crore. A whopping Rs 67,719 crore from the 3G auction and expected Rs 40,000 crore from BWA auction would also help the government in bridging the gap to some extent along with disinvestment in state-owned companies.