FinMin to keep fiscal deficit in check despite low revenue

The Finance Ministry today said it would endeavour to keep the fiscal deficit for the current fiscal at 4.6% of the GDP despite an anticipated slowdown in revenue collection.

"For the Finance Minister [containing] fiscal deficit is very important. He [Pranab Mukherjee] says the fiscal deficit should be contained at 4.6%. So we will all work towards that," Department of Economic Affairs Secretary R Gopalan told PTI.

He was speaking on the sidelines of a conference organised by the National Institute of Public Finance and Policy here.

Asked about the government finances, he said the growth rate of revenue is likely to be less this fiscal as compared to what was achieved in 2010-11.

 

"Our assessment or estimation of the growth in revenue this year is less than that of the last fiscal... As regards expenditure, we will try and maintain [it] at the level which we had provided in the Budget," he said.

The government managed to contain fiscal deficit, the gap between overall expenditure and receipts, at 4.7% of GDP during 2010-11, much lower than the revised estimate of 5.1%.

For the current fiscal, the government proposes to bring down the fiscal deficit to 4.6% of the GDP.

The deficit stood at Rs 3,69,043 crore for the fiscal ended March 2011, constituting 4.69% of the GDP.

The Centre's fiscal deficit was lower by around Rs 32,000 crore over the revised estimates for 2010-11 on the back of better revenue realisation and expenditure compression.

Total fiscal deficit during the year was 92% of the revised estimate of Rs 4,00,998 crore, showing an improvement on the fiscal front.

The Centre also cut its revenue deficit, an excess of the current expenditure over the current receipts, to 3.11% of GDP against the projected 3.4%. It was lower than even 3.2% projection as per the road map given by the 13th Finance Commission.

In 2011-12, the government is looking at bringing it down to around 3%.

Total revenue receipt during 2010-11 was Rs 7,94,277 crore (as per provisional figures), up almost 39% from the actuals of Rs 5,72,811 crore in the previous fiscal.

The government had revised the revenue collection figure for 2010-11 at Rs 7,83,833 crore, Rs 10,444 crore more than the revised estimate.

In his Budget speech in February, Finance Minister Pranab Mukherjee pegged the revenue collection for the current fiscal at Rs 7,89,892 crore.