Fiscal deficit shoots past half-way mark

Centres spending remained largely within targets,total receipts fell below expectations.

Even as the lower than expected GDP data cast a gloom,data on the Centres financial position brought in more worry for policymakers. The Centres fiscal deficit crossed the half-way mark and shot up to 55.4 per cent of the full year target to touch Rs 2,28,753 crore in the first four month of 2011-12. It was significantly lower at Rs 90,915 crore a year ago.

The government has set a fiscal deficit target of 4.6 per cent in 2011-12 but this could prove difficult as soaring oil prices and sluggish economic growth could impact its balancesheet.

The Centres revenue deficit was also way higher at Rs 1,94,920 crore or 63.4 per cent of the Budget estimate between April and July 2011 as compared to a mere Rs 50,075 crore in the corresponding period a year ago.

While the Centres spending remained largely within targets,its total receipts fell below expectations as tax collections were lower due to higher refunds and revenue from disinvestment proceeds failed to materialise during the period. More importantly,it did not have the cushion of windfall gains from auction of third generation spectrum as it did in 2010-11.

Total receipts rose to 17.3 per cent of the Budget estimate to Rs 1,46,412 crore as against 33.2 per cent of the BE a year ago. Tax revenues grew to Rs 1,14,078 crore to amount to 17.2 per cent of the full fisc target as against 17.2 per cent a year ago. Meanwhile,non tax revenues grew to a mere Rs 23,077 crore,amounting to 18.4 per cent of the BE by July end 2011-12 as compared to 84.9 per cent a year ago.

However,thanks to its belt tightening exercise,the Centres total expenditure grew to Rs 3,75,165 crore to touch 29.8 per cent of the BE,almost at the same level as last fiscal.

While non plan expenditure amounted to Rs 2,63,497 crore 32.3 per cent of the BE,plan expenditure stood at Rs 1,11,668 crore or 25.3 per cent of the full year target.