The government’s fiscal deficit for 2009-10 stood at 6.6 per cent of gross domestic product (GDP), which is slightly lower than its projection of 6.7 per cent.
Fiscal deficit rose 24.89 per cent in the financial year to Rs 4,12,307 crore over last year, against the revised estimate of Rs 4,14,041 crore. In 2008-09, it stood at Rs 3,30,114 crore.
While tax revenue rose only 2.61 per cent, to Rs 4,59,444 crore, in 2009-10 over 2008-09, total receipts rose to Rs 6,06,219 crore, which is slightly less than the revised estimate of Rs 6,07,506 crore for 2009-10. Plan expenditure increased by 9.71 per cent to Rs 3,02,199 crore, while non-plan expenditure increased to Rs 7,16,327 crore. With this, the total expenditure stood at Rs 10,18,526 crore.
In 2008-09, fiscal deficit should have been reduced to 3 per cent of GDP according to the Fiscal Responsibility and Budget Management Act. But, it stood at 6.2 per cent.
The fiscal deficit rose on account of the stimulus given by the government to help the economy recover from the effect of the global financial meltdown. The government had cut duties and increased plan expenditure, which resulted in a higher deficit. The excise duty was brought down from 14 per cent to 8 per cent, though the government partially rolled back the cuts to 10 per cent in February this year.
In the Budget presented in February this year, the government had projected that the fiscal deficit would come down to 5.5 per cent of GDP in 2010-11, 4.8 per cent in 2011-12 and 4.1 per cent in 2012-13.