Fiscal deficit may be about 5.6% in FY12: PMEAC

Fiscal deficit during the current financial year could overshoot the target by 1% to around 5.6% of the GDP, said Prime Minister's Economic Advisory panel member M Govinda Rao.

"Around that it could be," Rao said when asked if he expects fiscal deficit to be around 5.6%.

"They (government) have a huge problem. If fiscal deficit slippage is 1%, next year if you want to bring it down to 4.1%. There is going to be a huge problem," he said.

Last month, Chief Economic Advisor Kaushik Basu had said that he expects fiscal deficit as a percentage of GDP to overshoot the target. Prime Minister's Economic Advisory Council Chairman had said that the fiscal deficit is likely to 1% higher than the target of 4.6%.

The government's fiscal situation has shown deterioration at the end of the first nine months of the current financial year, mainly due to poor realisation of non-tax revenues and also the government has so far managed to raise Rs 1,145 crore this fiscal from disinvestment against a target of Rs 40,000 crore.

According to the Controller General of Accounts (CGA) data, the government's fiscal deficit went up to Rs 3.81 lakh crore, or 92.3% of the Budget estimates at the end of December.

For the current fiscal (2011-12), the government has estimated a deficit of Rs 4.12 lakh crore, or 4.6% of the GDP.

The Centre's fiscal deficit -- gap between overall expenditure and receipts -- was 45% of the estimates in the same period last year.