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H1 fiscal deficit gallops to 82.6% of full-year Budget target

The fiscal deficit touched 82.6 per cent of the Budget Estimates for 2014-15 to cross Rs 4.38 lakh crore at the end of September. During the same period of the 2013-14 fiscal, the deficit was at 76 per cent of the Budget Estimates (BE). Net tax receipts in the first half of the fiscal stood at Rs 3.23 lakh crore, or 33.1 per cent of BE, the data released by the Controller General of Accounts on Friday showed.

Total expenditure of the government during April- September was over Rs 8.62 lakh crore or 48 per cent of the estimates for the entire 2014-15 fiscal. Of the total expenditure, Plan spending was at over Rs 2.46 lakh crore. Under non-plan head, it was Rs 6.15 lakh crore.

Revenue collection was over Rs 4.17 lakh crore or 35.1 per cent of the BE for the period. Total receipts (from revenue and non-debt capital) of the government during the six months was over Rs 4.23 lakh crore. The data showed that the revenue deficit during the period was over Rs 3.45 lakh crore or 91.2 per cent of the full year target.

The fiscal deficit was over Rs 5.08 lakh crore or 4.5 per cent of GDP in 2013-14. It was 4.9 per cent in 2012-13.

For entire 2014-15, fiscal deficit — gap between government expenditure and revenue — has been
pegged at Rs 5.31 lakh crore or 4.1 per cent of GDP.

To reduce the fiscal deficit to the 7-year low level, the government had on Thursday announced a slew of austerity measures aimed at cutting non-plan spending by 10 per cent. As per the measures, the government has banned first class air travel for bureaucrats, meetings in five-star hotels and purchase of cars. It also decided to freeze new appointments. ‘Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government,’ a finance ministry statement said.

The government had put in place a fiscal consolidation roadmap as per which the fiscal deficit has to be brought down to 3 per cent of the GDP by 2016-17.

Meanwhile, Finance Minister Arun Jaitley said increased tax refunds in the current financial year is leading to higher fiscal deficit, which neared 83 per cent of full year target in the April-September period.

‘Higher tax refunds are getting reflected in fiscal deficit number. This year there were pending tax refunds estimated around Rs 1.20 lakh crore,’ he told reporters here. ‘It would be challenging to achieve indirect tax aim.

Direct tax target would be achievable. We would strive to achieve fiscal deficit aim for this fiscal,’ Jaitley said. On declining prices of crude oil Jaitley expressed confidence that economic growth in the current fiscal will be in the 5.5-5.9 per cent range.

‘The major priority of the government is to bring back growth momentum into country’s economy. The Indian economy has potential for achieving and sustaining higher growth,’ Jaitley said while addressing the Consultative Committee meeting here. For 2014-15, the minister expects that the growth could be in the range of 5.5-5.9 per cent, said a Finance Ministry statement after the meeting.

Jaitley outlined major priorities of the government as reviving and sustaining higher GDP growth, increasing savings, fiscal consolidation, keeping the current account deficit at moderate level and reviving investment cycle, among others.

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