During the corresponding period of last year, the fiscal deficit was at 76% of the full-year estimate.
The government nevertheless is confident of meeting the fiscal deficit target of 4.1% of GDP for FY15, as it relies on much higher savings on the revenue expenditure side in the second half of the year. A 10% cut in non-plan expenditure envisaged through austerity measures announced on Thursday and some improvement in tax collections in the second half are expected to help too.
A steep fall over the last few months in the price of Indian basket of crude, the the deregulation of diesel prices and deferment of the rollout of the Food Security Act will come in handy for the government.
Union finance minister Arun Jaitley said, Fiscal deficit is showing an upward trend due to higher tax refunds of about R1.2 lakh crore in both direct and indirect taxes. We will be close to achieving the direct tax target for the year, while it may be a challenge in the case of indirect taxes.
In the last few years of the UPA government, fiscal deficit targets were managed by squeezing productive (capital) spending. Delayed refunds of taxes and rolling over of subsidy disbursal a bit more than conventionally were the other strategies.
Non-plan expenditure on revenue account in the first half of the fiscal stood at 51% of the annual estimate, against 52.3% recorded in the same period a year ago. Analysts said this trend is likely to be accentuated in the coming months.
For the year, the finance ministry has kept a fiscal deficit target of R5.31 lakh crore or 4.1% of GDP. It was over R5.08 lakh crore or 4.5% of GDP in 2013-14.
Net tax receipts in the first half of the fiscal stood at R3.23 lakh crore, or 33.1% of the full-year estimate, while total revenue collection was over R4.17 lakh crore or 35.1% of the Budget estimate, showed data released by the Controller General of Accounts. Only dividend receipts in non-tax revenue met the target. The government aims to collect R7.36 lakh crore from direct taxes this year and R6.24 lakh crore from indirect taxes.
The data showed that the revenue deficit during April-September was over R3.45 lakh crore or 91.2 % of the full year target.
Total expenditure of the government during the first half was over R8.62 lakh crore or 48% of the annual estimate.