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Fiscal deficit touches 97.4% of budget estimate in April-February period

The government's fiscal deficit touched 97.4 per cent of the budget estimates (BE) in the April-February period of the current fiscal. In absolute terms, the fiscal deficit, or gap between expenditure and revenue receipts, stood at over Rs 5.07 lakh crore at the end of February, according to the data released by Controller General of Accounts (CGA) today. The Government has estimated the fiscal deficit for current fiscal at Rs 5,13,590 crore, or 5.1 per cent, of GDP in the budget for 2012-13. However, in the revised estimate, it pegged the deficit to be at 5.2 per cent for the fiscal ending March 31.

The fiscal deficit rose from the budgeted levels due to the rising subsidy outgo. To contain it at 5.2 per cent, the government has taken a number of steps like rationalisation of expenditure including 10 per cent mandatory cut on non-plan expenditure. Besides, steps have been taken to cut the subsidy outgo on petroleum products.

The fiscal deficit in the corresponding period last year was 94.6 per cent of the BE. Expenditure during the April-February period of current fiscal was 85.2 per cent of the BE against 83.9 per cent in same period last fiscal. Total expenditure during the April-February period stood at over Rs 12.19 lakh crore. Total receipts stood at over Rs 7.12 lakh crore, or 78.3 per cent of the BE.

Tax revenue during the period was over Rs 5.71 lakh crore, About 77.1 per cent of budget estimates, compared to 76.9 per cent achieved in the same period last year. The government has rolled out the fiscal deficit road-map for the 12th Five Year Plan. It estimates fiscal deficit to come down to 4.8 per cent in 2013-14 and to 3 per cent of the GDP by financial year 2016-17. The government bridges its fiscal deficit through market borrowings.


Q3 CAD AT RECORD HIGH 6.7% OF GDP

The country's current account deficit (CAD) touched a record high of 6.7 per cent of gross domestic product (GDP) in the October-December quarter, mainly on account of widening trade gap.

The CAD, which is the difference between inflow and outflow of foreign currency, 'widened from 5.4 per cent in Q2 (July-September) to a record high of 6.7 per cent of GDP in Q3, driven mainly by large trade deficit,' the Reserve Bank of India (RBI) said in its report on balance of payments.

The report said that while merchandise exports did not show any significant growth during the third quarter ending December 2012, imports shot up by 9.4 per cent, spurred largely by oil and gold imports. The trade deficit, the RBI said, widened to $59.6 billion in third quarter, up from USD 48.6 billion in the corresponding quarter a year ago.

Finance Minister P Chidambaram said in his Budget speech, 'My greater worry is the CAD.' He attributed the rise in current account deficit to factors like excessive dependence on oil imports, the high volume of coal imports, passion for gold and slowdown in exports.
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