FM reins in fiscal deficit at just 4.9% of GDP in 2012-13

Says to focus on revenue raising measures than expenditure compression this time around

The Finance Ministry was able to rein in the Centre's fiscal deficit at 4.9% of GDP in 2012-13, much lower than 5.2% pegged in the revised estimate (RE). In fact, it was also significantly less than 5.1% projected in the budget estimate.

However, the fiscal deficit numbers released for April, 2013 showed that the gap between the Centre's expenditure and revenues stood at a whopping 17.3% of the Budget target. The fiscal deficit numbers for both--March and April, 2013--were released by the Controller General of Accounts today.

While the government was accused of compressing expenditure too much to rein in fiscal deficit, it did not meet even the RE targets for outlays. However, it was also able to raise revenues higher than RE.

Finance Minister P Chidambaram said the government will focus more on revenue raising measures than expenditure compressing for the current financial year.

The Centre's fiscal deficit stood at Rs 4.90 lakh crore in 2012-13, six% lower than the RE of Rs 5.21 lakh crore. The Centre's revenues stood at Rs 9.19 lakh crore during 2012-13, which were 1.1% higher than Rs 9.09 lakh crore estimated in the RE.

On the other hand, its expenditure was 1.5% lower at Rs 14.31 lakh crore over Rs 1.41 lakh crore pegged in the RE. The government was able to mop up higher revenue despite tax part of it failed to meet the RE slightly by 0.1%. Tax collections stood at Rs 7.41 lakh crore against Rs 7.42 lakh crore.

In the RE, the government reduced its disinvestment target from Rs 30,000 crore in BE to Rs 24,000 crore in RE. However, it was able to collect Rs 25,890 crore from the sale of government equity in PSUs.

The government was blamed for drastically cutting plan expenditure to various ministries and departments in the RE compared to BE. In fact, it further slashed expenditure under this count. Plan expenditure stood at Rs 4.14 laKH crore in 2012-13, 3.5% lower than Rs 4.29 lakh crore in RE.

However, the government was able to cut its non-plan expenditure marginally as well, albeit moderately.  Its outlay under this head stood at Rs 9.95 lakh crore, which is short by 0.6% of RE at Rs 10.02 lakh crore.

Finance Minister P Chidambaram said the government will focus on raising revenues to bring down deficit to below 4.8% of GDP in the current financial year.

"I don't wish to compress expenditure, therefore revenues have to go up... For 2013-14, (we) have to do much better than 4.8%," he told reporters here.

Together with March, 2013, fiscal deficit numbers for April, the first month of the current financial year also came. It showed that fiscal defict stood at Rs 93,612 crore, which is 17.3% of BE at Rs 5.42 lakh crore. At this point of time, fiscal deficit had stood at 13.1% of BE in 2012-13.