During the April-November period, fiscal deficit touched as much as 94 per cent of the budgeted target.
It is still possible to meet the target if the government remains determined to contain expenditures during the December-March period, in line with the FY13 pattern, Barclays said in a report today.
"Its needs to reduce expenditure by nearly Rs 1 trillion during the December-March period," it added.
"To meet to its fiscal deficit target of 4.8 per cent of GDP, the government needs to limit spending to Rs 5.3-5.6 trillion during December-March, resulting in incremental deficit of Rs 0.3 trillion during the period," the report said.
In FY13, the budget deficit was high in H1, but the government was able to tighten its belt significantly in the final three-four months, which resulted in limiting the full year fiscal deficit below 4.8 per cent from a targeted 5.3 per cent of the GDP.
However, the brokerage house also admits that cut in expenditure this year seems difficult due to the upcoming elections scheduled for April-May.
To meet its original budget targets, the government needs to mop up about Rs 6.1 lakh crore in revenues to finance planned spending of Rs 6.4 lakh crore in the remaining part of FY14, the report said.
It further said the government can aim for a 10-15 per cent year-on-year increase in revenues, giving it revenues of Rs 5-5.3 lakh crore during December-March, about Rs 0.8-1 lakh crore below the original target. The budget pegged a revenue growth of 19.1 per cent, but according to the latest figures the direct tax mop-up was only 12.5 per cent.
The report said that the government can cut its expenditure through reduction in capital expenditure, defence purchases and investments in international financial institutions.
The ministries of education, health, road and highway transport, and rural development could see their budgeted spending reduced significantly to be more in line with historical trends, the report said.
The brokerage further said if the government cuts its budgeted capital spending by Rs 30,000 crore, remaining nearly Rs 70,000 crore in cuts would need to come from slashing revenue spends like salaries, interest payments and grants.
"Postponing subsidy payments, reducing Central assistance for the states, and cutting or delaying payments on some social/economic programmes would make it feasible for the government to reduce overall spending enough to meet its deficit target," the report added.