Fiscal deficit worry, as spending above last year's pace

Confirming the Reserve Bank’s earlier apprehension on the fiscal deficit surpassing the targeted 4.6 per cent of GDP in 2011-12, the central government’s fiscal deficit has already touched a little over 55 per cent of the estimated gap between its expenditure and revenue for the entire financial year in just the first four months of 2011-12.

At this point of time during 2010-11, the deficit was just 23.8 per cent of the budget estimates for the entire year.

In fact, the deficit has more than doubled to Rs 2.28 lakh crore in April-July this financial year, compared to the corresponding period of 2010-11. However, the pace of increase in the slowed in July. It had quadrupled till June, year-on-year.

The government got a fifth less in non-tax revenue. Last year, there was the huge proceeds of over Rs 1 lakh crore from sale of telecom spectrum for high speed broadband and other services.

Tax revenues were also only marginally higher, at Rs 1.14 lakh crore against Rs 1.13 lakh crore in the comparable period.

The government could manage only Rs 1.46 lakh crore of receipts, which constituted 17.3 per cent of the budget estimates of Rs 8.44 lakh crore for 2011-12. Last year in the corresponding period, 33.2 per cent of the total receipts of the budget estimates were achieved.

Compared to last year, the government has spent more on both plan and non-plan expenditure. However, the percentage of non-plan expenditure spent in the four months accounted for 32.3 per cent of total budget estimates for this financial year, versus 30.3 per cent last year.

The trend reversed in plan expenditure, as the percentage incurred till July of 2011-12 constituted 25.3 per cent of the budget estimates, compared to 29.4 per cent in the corresponding period last year.

The Centre’s revenue deficit also touched Rs 1.9 lakh crore till July, constituting 63 per cent of the budget target for year, against just 18.1 per cent in the corresponding period of last year.