Fiscal deficit doubles over Rs 2 lakh cr in Apr-Oct

With this, the deficit during April-October 2009 has reached over 61 per cent of the targeted level of over Rs 4 lakh crore for the current fiscal.

The government has projected fiscal deficit at 6.8 per cent of the GDP for the current fiscal. However, with GDP likely to increase for 2009-10 with a better-than-expected rate of 7.9 per cent in the second quarter, there is more room to contain the deficit within the targeted level.

Excise duty cut
The fiscal deficit has crossed over 87 per cent of the targeted amount for 2008-09. The government was expecting a deficit of just 2.5 per cent of GDP at this point of time last year. As excise duty was cut by six per cent and service tax by two per cent from December onwards and plan expenditure rose as part of stimulus packages, the government revised its target to 6 per cent of GDP, which later turned out to be 6.2 per cent. The rise in fiscal deficit was due to tax revenues of the government decreasing by around eight per cent to 2.13 lakh crore till October this fiscal against Rs 2.32 lakh crore a year ago, while its expenditure rose by 31 per cent to Rs 5.36 lakh crore from Rs 4.08 lakh crore.