CAG pegs fiscal deficit at 3.34% of GDP in 04-05

New Delhi, March 21 | Updated: Mar 22 2006, 05:30am hrs
In a striking difference with Budget estimates for 2004-05, the Comptroller and Auditor General has put fiscal deficit at Rs 1,03,798 crore during 2004-05, lower by Rs 42,817 crore than proposed in the Budget at Rs 1,46,615 crore.

The fiscal deficit was just 3.34% of GDP during 2004-05, according to a CAG report tabled in Parliament on Tuesday. The figure was 29% less than the Budget estimates for that year.

Even after proposing a 3% reduction, the government has estimated fiscal deficit at 3.8% of GDP for 2006-07, whereas much lower deficit was there two years ago, according to the CAG report.

Explaining the difference, additional deputy comptroller and auditor general U Bhattacharya told reporters, Ideally, there should not be any difference between the two estimates. These are because the parameters of measuring huge government accounts are different by CAG and official agencies.

He said the difference was attributable to a more than 116% increase in recovery of loans and advance, largely due to debt swaps, compared to Budget figures. This, however, should be viewed as a one time realisation because it led to an equal reduction in the assets base of the Union government, the report said.

Decline in capital expenditure and loans and advances relative to the Budget estimates also contributed to the reduction in fiscal deficit.

Numbers Game
CAG has put fiscal deficit at Rs 1,03,798 crore in 2004-05, lower by Rs 42,817 crore than proposed in the Budget at Rs 1,46,615 crore
Even after proposing a 3% reduction, the government has estimated fiscal deficit at 3.8% of GDP for 2006-07, whereas much lower deficit was there two years ago
This difference is because the parameters of measuring huge government accounts are different by Comptroller and Auditor General and official agencies
Difference is attributable to more than 116% rise in recovery of loans,largely due to debt swaps, and advance compared to Budget figures
Revenue deficit was estimated at Rs 78,700 cr, 3.04% more than Budget estimates for 2004-05
For the first time, both the consolidated fund of India and the public account had surplus in 2004-05 and the entire amount was used for increasing cash balances
For the first time, both the consolidated fund of India and the public account had surplus in 2004-05 and the entire amount was used for increasing cash balances
With respect to public debt, though both receipt and disbursements significantly exceeded the budgeted figures, the net impact of these in terms of increase in liabilities was less than the budget estimates.

On the whole, while fiscal marksmanship was evident on the revenue receipt and revenue expenditure sides, deviations in other parameters relative to the Budget estimates were quite significant. Revenue deficit was estimated by CAG at Rs 78,700 crore, 3.04% more than the Budget estimates for 2004-05.

Explaining this difference, the report said revenue receipts fell short of the Budget estimates by 0.92% and better realisation of non-tax receipts was inadequate to compensate the shortfall in tax collections. Though the revenue expenditure was generally maintained at the budgeted levels, shortfall in tax collections relative to the budget estimates led to an increase in revenue deficit, the report said.

For the first time, both the consolidated fund of India and the public account had surplus in 2004-05 and the entire amount was used for increasing cash balances, the report said. There was Rs 45,222 crore surplus in consolidated fund and Rs 27,119 crore in public account. CAG said the proceeds of this surplus was used for increasing cash balance of the government under market stabilisation scheme.

PTI