Tags:
Journalism of Courage
The Centres final fiscal deficit may reach close to 5 per cent for 2012-13,a substantial improvement over the target of 5.2 per cent announced by finance minister P Chidambaram in his Budget speech.
The trigger for the better-than-expected performance is the achievement of tax revenue targets and the spending cuts introduced by the government which have sheared off an additional Rs 20,000 crore from the deficit.
The provisional figures are yet to come in but initial trends reveal that there may have been additional savings of at least Rs 20,000 crore to Rs 25,000 crore over the revised estimates, said a senior government official.
Figures of tax revenue furnished by the Controller General of Accounts till Monday show the government will hit the Revised Estimate for 2012-13 of Rs 10,38,000 crore.
While indirect tax collections are likely to exceed the Revised Estimate of Rs 4.69 lakh crore,direct tax receipts have registered a shortfall of about Rs 4,000 crore against the target of Rs 5.65 lakh crore.
Strict implementation of spending cuts announced by finance minister P Chidambaram helped lower the Revised Estimate for 2012-13 to Rs 14,30,825 crore from the Budget Estimate of Rs 14,90,925 crore. The surfeit of good news could be embarrassing for the ministry as the goal post for 2013-14 set at 4.8 per cent of GDP would seem ridiculously easy even before the year has rolled out.
If the fiscal deficit dips below 5 per cent of GDP it would be the first time since 2010-11 that it would have happened. It would also give the Reserve Bank of India more comfort to lower interest rates.
Chidambaram has also acknowledged that the fiscal and current account deficits have become the key challenges for the country. For 2013-14,the government hopes to curb the fiscal deficit at 4.8 per cent,which has been termed ambitious by many analysts.
Spending cuts that resulted in the unexpected savings are the key to the improved financial position as direct tax collections may or may not meet the expectations, the official said.
Between April and February,the Centres fiscal deficit had touched Rs 5.07 lakh crore or 97.4 per cent of the full fiscal target of Rs 5.21 lakh crore.
A clearer picture of government finances would be available by next week when the Controller General of Accounts is expected to submit the provisional accounts for 2012-13.
The final data would only be available by May end.
