A healthy 30 per cent growth in revenue collections has helped the government sustain its fiscal deficit at Rs 87,100 crore up to October, which is around 59 per cent of the budget estimate. The comparable figure last year was Rs 92,068 crore.
The revenue deficit was also lower at Rs 67,299 crore during April-October against Rs 70,284 crore in the corresponding period in 2005-06, according to data released by the Controller General of Accounts today.
Commenting on the figures, Finance Minister P Chidambaram said that the government was on course to achieve the budget estimate figures on fiscal and revenue deficit.
He also expressed the confidence of meeting the target laid down under the Fiscal Responsibility and Budget Management Act (FRBM) as per which the revenue deficit is to be brought down to nil by 2008-09 and fiscal deficit to three per cent or below by 2008-09.
The minister said that the revenue collections so far were impressive and the tax revenues were growing at 30 per cent up to October end. Tax revenues up to October was Rs 1,55,660 crore compared with Rs 1,16,297 crore in the same period last year.
Overall, receipts was Rs 2,02,169 crore which was 49 per cent of the budget estimate against Rs 1,60,290 crore in April-October 2005-06.
Despite an increase in both plan and non-plan expenditure, Chidambaram said the increase was according to expectation. He said the departments of agriculture, elementary and secondary education, power, rural development, ministry of tribal affairs had all spent more than what they had spent during April-October last year.
The department of road transport and highways and the department of urban development had however spent lower than last year.
Total expenditure during April-October was Rs 2,89,269 crore, compared with Rs 2,52,358 crore during the same period a year ago.
Chidambaram said that the transfer to the states and union territories was Rs 16,601 crore this year compared to Rs 14,536 crore last year.
Refuting the charge made in some quarters that the good fiscal performance is an accident, Chidambaram said this was on account of the fiscal prudence that the government has adopted.
The ministry of finance has also allowed the space to experiment with new ideas in tax administration. It is important that the ministries spend the money that is provided in the budget but do not spend more than that, he said.
Chidambaram said the government was moving slowly but surely to a technology based tax administration.
He added that though there could be some initial problems in adjusting to the system, in the long run it would benefit the tax payer, reduce discrimination of the tax collector and increase revenues which is vital for development.
He pointed out that though there was initial criticism of e-filing of tax returns for corporates, the government was now hopeful that the number of e-returns would exceed that of paper returns.