JOIN USPosing a serious challenge to the government’s aim to stick to the 4.1 per cent fiscal deficit target, the country’s fiscal deficit during the first eight months of the fiscal (April-November) stood at Rs 5.25 lakh crore. This is nearly 99 per cent of the full year target and is one percentage point higher than the corresponding period, last year.
The full year target for fiscal deficit is Rs 5.31 lakh crore. As per the government data, the net tax receipts were at Rs 4.13 lakh crore in the first eight months of the current fiscal. The tax receipts have not yet reached even 45 per cent of the total tax earnings estimated for the fiscal 2014. The government had estimated Rs 9.44 lakh crore net earnings on tax revenue side.
Reports say that the government is heavily depending on higher dividend from PSUs to fill the shortfall in tax receipts. This is apart from the deep budget cuts of various ministries. The fiscal deficit was over Rs 5.08 lakh crore or 4.5 per cent of GDP in 2013-14. It was 4.9 per cent in 2012-13.
The government had put in place a fiscal consolidation roadmap as per which the fiscal deficit has to be brought down to 3 per cent of the GDP by 2016-17. The Finance Ministry has suggested it as ambitious.