Fiscal deficit above 100% of GDP till Dec

India’s fiscal deficit or the difference between the government’s expenditure and its revenue reached 100.2 per cent in the first nine months of the current financial year, a clear indication that the Centre may resort for massive spending cut before the Budget if revenues are not substantially generated.

The fiscal deficit stood at Rs 5.32 lakh crore during April-December of 2014-15, surpassing a full-year budgeted target of Rs 5.31 lakh-crore. The target was breached by 0.2 per cent. There are still three more months left for the fiscal year to end.

The government has budgeted the fiscal deficit at 4.1 per cent of GDP for the year ending March 31. Ideally, the deficit should have come down after a record slump in crude oil prices following which the government hiked excise duty on petrol and diesel four times.

Finance Minister Arun Jaitley has time and again said that he will meet the budget target. Recently, even Prime Minister Narendra Modi said that there will be no slippage in meeting the deficit target.

Although the government has earned Rs 22,600 crore from the Coal India (CIL) divestment helping it reach the FY15 divestment target halfway, the revenues from tax incomes have been measly.

Net tax revenue

The government’s net tax revenue collection till December end was Rs 5.46 lakh crore or 55.8 per cent of the Rs 9.77 lakh crore estimated for the whole year.

The tax mop-up was slightly higher (58.6 per cent) during the same period last year.

Total receipts (from revenue and non-debt capital) during the April-December of the year was Rs 7.04 lakh crore or 55.7 per cent of the target, same as last year according to the data.

Plan expenditure of the government during the period was Rs 3.52 lakh crore (61.3 per cent) and non-Plan expenditure was Rs 8.8 lakh crore (72.4 per cent), the data said. The fiscal deficit was over Rs 5.08 lakh crore or 4.5 per cent of GDP in 2013-14.