Numbers on the Union government?s account for the first half of the year show that the financial position has deteriorated substantially faster than expected. The revenue deficit in the first six months of the year has shot up three-fold, from R74,921 crore in the previous year to an astounding R2,33,428 crore in the current fiscal. And the revenue deficit numbers are now 76% of the budget estimates for the whole year as compared to the 27% level reached in the same period of the previous year. The growing revenue deficit has also pushed up the fiscal deficit to R2,92,458 crore in the first six months of the year, which is more than twice the R1,33,252 crore incurred in the same period of the previous year. But, surprisingly, the deterioration is not because of excessive spending, but due to the shortfall in revenues. Total expenditure has gone up to R5,99,093 crore, which is only 11.4% more than the R5,37,937 spent in the previous fiscal year. In fact, the government had only spent 47.6% of the annual budget in the first half of the current fiscal year, whereas it had spent a marginally higher 48.5% in the same period of the previous year. The government has held the overall spending in check, although few ministries, like the ministry of consumer affairs, food & public distribution and the oil ministry, have already spent almost 82% and 483% of their respective non-plan budget allocations for the year on account of the growing subsidy bills.
So, the main reason for the growing deficit is the shortfall in revenue collections. Total receipts of the central government in the first half of the year were only R3,06,635 crore, which is 24.2% lower than the collection of R4,04,725 crore in the same period of the previous year. In relative terms, the government could only collect 36.3% of the budgeted amount in the first six months, which is substantially lower than the 55.6% of the budgeted receipt collected in the corresponding period of the previous year. Both tax and non-tax revenues account for the shortfall. While the net tax revenues of the central government rose by 4.1% to R2,43,083 crore, tax collections were only 36.6% of the budgeted collections in the current fiscal year, whereas the government was able to collect as much as 43.7% of the budgeted amount in the same period of the previous fiscal year. In the case of non-tax revenue, collections fell by a whopping 69% to R50,797 crore in the current fiscal year, mainly on account of the hugely successful spectrum auction last year. With slower growth in the second half of the year set to further worsen revenue collections, even as the subsidy bill continues to bloat, the budget deficits are sure to exceed the targets.
