Gross fiscal deficit, as proportion of the budget estimates, was placed higher than a year ago. Revenue deficit, after adjusting the profit on sale of RBIs stake in SBI, was 122.9% of the full year budget estimates.
Tax revenue remained buoyant, rising by 22% over that during April-August 2006. Non-tax revenue (net of profit on RBI stake in SBI) registered a growth of 21.2% during the same period. During 2007-08, up to October 19, 2007, net inflows by foreign institutional investors (FIIs) amounted to $21.2 billion as compared to outflows of $933 million in the corresponding period of 2006-07. Foreign direct investments (FDI) inflows were $6.6 billion during April-July 2007 as against $3.7 billion, a year ago. On the other hand, non-resident Indian deposits registered net outflows amounting to $148 million during April-July 2007 as against net inflows of $1.6 billion during April-July 2006.
However, merchandise trade deficit, on balance of payments basis, increased from $16.9 billion in April-June 2006 to $21.6 billion in April-June 2007. Net surplus on the invisibles account exhibited buoyancy during the first quarter of 2007-08, led by exports of software, business services and private remittances, and continued to finance 78.2% of the merchandise trade deficit.
Despite large merchandise trade deficit, higher net invisible surplus contained the current account deficit ($4.7 billion) during the first quarter of 2007-08 at broadly the same level ($4.6 billion) as in the first quarter of 2006-07.
During 2007-08 so far (April-August), growth of merchandise exports moderated, while imports posted a high growth rate. Non-oil imports registered a high growth due to robust growth in capital goods. Oil imports registered a sharp deceleration from the strong growth recorded during the corresponding period of the previous year.