Along with lower GDP growth, the economy?s deficit too has turned grave. The country?s fiscal deficit has risen to 54.5% of the Budget estimate (BE) till October-end this year totalling Rs 82,256 crore, according to an official statement on Friday. It had stood higher at 58.6% of the BE in the same period last fiscal.
Revenue deficit too has rose slightly to 80.5% of the BE, amounting to Rs 57,562 crore till October 31, 2007. It was marginally lower at 79.4% of the BE during the same period last fiscal.
The government, however, has time and again said it is confident of reaching its deficit targets for the year. The government has set a target of 1.5% of the GDP as revenue deficit for 2007-08 and has estimated the fiscal deficit at 3.3% of the GDP.
Total receipts stood at Rs 2,86,646 crore during the period with revenue receipts significantly higher at 50.7% of the BE to stand at Rs 2,46,546 crore. Of this, tax revenue contributed the major chunk of Rs 1,95,339 crore while non tax revenue provided Rs 51,207 crore.
Total expenditure was at Rs 3,68,902 crore. Of the total expenditure, interest payments accounted for Rs 89,983 crore. Non-Plan expenditure was Rs 2,69549 crore, while Plan expenditure was Rs 99,353 crore.
Despite this buoyancy in tax revenue, the deficit is likely to increase given that the government has recently raised an additional demand for grants to the tune of Rs 33,291 crore. Nearly half of the additional funds would be used to cover bonds issued to oil firms to partly compensate them for selling cheap fuel, and pay interest on market intervention bonds used to offset the adverse impact of large capital inflows.
The Centre is also spending heavily to help exporters hit by a firm rupee, and to fund welfare schemes for the poor.
