How has the government managed its finances

Updated: Mar 1 2006, 06:44am hrs
Measures

Tax-GDP ratio to be increased to 11.2% during 2006-07.

GBS increased by 20.4% to Rs 1,72,728 crore.

Non-Plan expenditure to be increased by only 5.5%.

Fiscal deficit to be reduced to 3.8% of GDP and revenue deficit to 2.1% of GDP.

Defence capital expenditure increased to Rs 37,458 crore.

Revenue deficit as ratio of fiscal deficit has come down.

Implementation of the 12th Finance Commission award to continue.

Implications

Government will have more resources for undertaking social sector initiatives.

Sectors like energy and transport will have more funds at their disposal.

Slow growth in non-Plan expenditure will help govt improve fiscal health.

Reduction in deficits will enable the government to meet the FRBM targets and reduce borrowings.

It will enable defence ministry to procure modern equipment.

States will be able to continue on the path of fiscal correction.

States finances to improve further.