Fiscal parameters worsen in relation to RE in Apr-Feb 2012-13 y-o-y

A few days before release of the official figures for the Centre's fiscal deficit for 2012-13, an important Finance Ministry report says that key fiscal parameters deteriorated in relation to revised estimates (RE) during April-February of the year compared to corresponding period of 2011-12.

"The fiscal outcome during April-February of FY'13 indicates some deterioration in terms of key deficit indicators as percentage of revised estimates (RE), vis-a-vis their position during the same period of the previous fiscal year, mainly due to increased expenditure," says a quarterly public debt management report by the Middle Office in the Finance Ministry.

The observation assumes importance since the Finance Ministry recently exuded confidence of bringing down the Centre's fiscal deficit to below 5.2% of GDP as pegged in the revised estimates.

The report says gross tax collections during the period at 78.3% of the revised estimtes were marginally higher than 78.0% a year ago.

Total expenditure during April-February 2012-13 at 85.2% of the RE was higher than 83.9% during the same period of previous year.

"As a result of higher expenditure, revenue deficit and fiscal deficit during April-February 2012-13 at 101.2% and 97.4% of RE were higher than 96.6% and 94.6%, respectively, during the same period a year ago," the Middle Office report said.

Primary deficit, which is basically fiscal deficit sans interest payments, at 119.2% of the RE was also higher than 104.5% during the corresponding period of the previous fiscal year, the report said.

Finance Minister P Chidambaram had come out with a five-year fiscal roadmap which pegged fiscal deficit at 5.3% of GDP for 2012-13 against 5.1% of GDP in the Budget Estimate. However, the revised estimated pegged it a bit downwards at 5.3%. He recently exuded confidence that the deficit would be lower than the RE.

The fiscal deficit figures for entire 2012-13 are scheduled to be released on May 31.

Meanwhile, the report said government debt rose 0.4% to over Rs 40.83 lakh crore in the January-March period of 2012-13 fiscal, over the previous quarter.     "This (Rs 40,83,040 crore debt) represented a quarter-on- quarter increase of 0.4% (provisional) compared with an increase of 4% in the previous quarter (Q3 of FY13)," it said. End