to a large extent to the fact that the bulk of the Rs 61,552 crore subsidy bill that Mukherjee avoided paying last year has been footed this year.
Gross tax revenue growth in 2012-13, to meet the Budget target of Rs. 10.78 lakh crore, should be 21%. Going by the pace of tax revenue growth, there could be a shortfall of Rs 30,000-40,000 crore on this front. Spectrum revenue too would be Rs 20,000 crore or so lower than the budgeted level. But Chidambaram can save more on the expenditure front – apart from the expected gain from the slow/flat growth in subsidies, he could achieve significant savings in the remaining part of the year in Plan capital expenditure where the growth in the first seven months has been about 34% as against the budgeted 27%.
So Chidambaram could try and restrict the fiscal deficit to around Rs 5.4 lakh crore, as against the budgeted Rs 5.14 lakh crore. That means the deficit in the final five months should be restricted to Rs 1.7 lakh crore. That is a tough task but not an impossible one. The slowdown in GDP growth will have an adverse effect on the fiscal deficit when expressed as percentage of the GDP. Yet, a figure of 5.3-5.4% doesn't seem to be beyond reach.