Fiscal deficit jumps in H1 on lower tax collection
November, 01st 2011
The Government's fiscal deficit in the just ended first six months has exceeded 70 per cent of the Budget target, according to the Controller General of Accounts (CGA).
The data also show a massive revenue shortfall. Only 36.6 per cent of the budgeted tax revenue and 40.5 per cent of the non-tax revenue have been achieved in the first six months.
Non-tax revenue includes income from disinvestment and auction of spectrum.
Meanwhile, 51.6 per cent of the Budget estimate for non-Plan expenditure has been exhausted.
Non-Plan expenditure involves, besides others, interest payment and subsidy payout.
But the Government has not given up hope. A senior government official said that indirect tax revenue is expected to grow at higher rate during the second half of this fiscal.
There could also be some disinvestment, he added.
Mr D. K. Joshi, Chief Economist, Crisil, said that the CGA records the payments received and expenditure made only up to the last working day of the month, while a part of tax payment is made during the following month. So, there will always be a gap between the actual and CGA's numbers, he said.
Even so Mr Joshi did not rule out fiscal slippage. Crisil has estimated that the fiscal deficit could reach 5.2 per cent of the gross domestic product (GDP).