The improvement in public finances is mainly on account of the expenditure compression pursued by the finance ministry. The non-plan expenditure, despite the Kargil conflict, has by and large remained under control. The non-plan expenditure uptil the end of August 1999 was Rs 74,690 crore, which was 36.1 per cent of the budget estimates. During the corresponding period last year, the government has spend 38.0 per cent of the budgeted amount.

As far as total expenditure was concerned, the government had spend Rs 1,01,754 crore till the end of August. This amounted to 35.8 per cent of the budget estimates. During the corresponding period last year, the government, was slightly liberal with its purse, and the total expenses amounted to 35.9 per cent of the budget estimates.

Expenditure management, also hada positive impact on the revenue deficit, which is another important parameter for measuring the health public finace. Marginal improvement was also witnessed on that count. The revenue deficit at the end of August was Rs 33,412 crore, which was slightly lower than Rs 34,031 crore recorded on July 31, 1999.

However, on the collection side, the revenue continued to be the problem area. Despite, the rise in oil prices, the net revenue realisation uptil August worked out to be Rs 32,302 crore, which was less than Rs 32,572 crore collected during April-August 1998. Oil imports, during the first five months amounted to $ 3.6 billion which was 56.45 per cent higher the oil imports bill during the corresponding period in the last financial year.

However, the total imports, including oil and non-oil, rose by only 3.94 per cent, partly explaining the low customs realisation. Ironically, the situation would have been worst, but for the rising oil prices.

There was no let up as far as fiscal deficit wasconcerned. The fiscal deficit uptil August was Rs 48,126 crore which was more than Rs 45,931 crore recorded at the end of July 1999. This worked out to be 60.2 per cent of the budget estimates. It is also a pointer to the increased reliance of government on borrowed funds.

At the end of August government had borrowed Rs 50,803 crore from the market which worked out to be 88 per cent of the budgeted amount of Rs 57,461.32 crore. During the similar period in the previous financial year, the government had borrowed 39,653 crore which was 82 per cent of the budget estimates. The government, thus has been borrowing at an accelerated pace during the current financial year.

Although the figures of public finances uptil August 1999, suggest slight improvement in the working of the government, much would depend upon the revenue collection during the second half of the fiscal. The revenue department too is hopeful of better performance in the busy season. The estimates of the gross domestic product for the firstquarter (April-June 1999) revealed the the economy was on the recovery path with a growth of 5.5 per cent as against 3.6 per cent in the corresponding quarter last year. The manufacturing sector was up by 6.2 per cent during the period as compared to 5.2 per cent in the corresponding period previous year.

The buoyancy being witnessed in the manufacturing sector is likely to translate into higher collections of indirect taxes and the same may found reflection in the revenue figures with some time lag.