The government expects to keep additional spending for this fiscal below Rs 1 lakh crore which matches the extra income it has received from the sale of 3G spectrum and tax revenue increase over the budgeted target, a senior finance ministry official requesting anonymity told FE. This means the fiscal deficit target for this fiscal ? 5.5% of GDP? would be met, but not outperformed, the official added.
Fiscal deficit is the excess of government expenditure over its revenue. It denotes the level of borrowings. He said, ?The government has got Rs 65,000 crore extra (over the budget target) from the sale of 3G spectrum. In addition, another Rs 30,000 crore is expected from increased revenue collection over the budgetary target. So, the additional spending could be kept somewhere in the region of Rs 1 lack crore.? Of the two supplementary demand for grants, the government has received over Rs 74,000 crore.
The Centre recently has sought parliamentary approval for a gross additional expenditure of Rs 44,945.52 crore in 2010-11 which includes net cash outgo from the exchequer of Rs 19,812.37 crore and the rest garnered through internal savings of the ministries concerned. The additional funds would be used for payments including fertilizer and food subsidy and construction of rural roads.
It has already taken an additional Rs 54,588.63 crore in the first supplementary demand for grants in August. The government is confident that the additional spending would not upset its fiscal deficit targets. ?Finance minister is keen to control fiscal deficit at 5.5 % level for this fiscal,? the finance ministry official said.
While tax revenues have risen by 58.4% between April to September this year, the government has also earned Rs 1,00,000 crore from 3G spectrum auction as against the Budgeted Rs 35,000 crore.