Revenue gap widening fast

The finances of the central government continues to be under strain with the revenue deficit having touched 76.2 per cent of the Budget target of 2.5 per cent of the gross domestic product, at the end of just four months of the fiscal year.

The revenue deficit had touched 60 per cent at the end of the first quarter. Figures of central government finances, released by the Controller General of Accounts today, shows the steep rise has been caused by the slowing down of the growth rate of both tax and non- tax revenue from last fiscal's level.

The net tax revenue has touched 15 per cent of the Budget target compared with 15.8 per cent in the first four months of 2003-04. The non tax revenue growth has also logged only 15.7 per cent, against 16.4 per cent in the same period of last year.

As a result, the total receipts of the Centre has touched 21.4 per cent of the Budget target at Rs 72,898 crore. This was Rs 65,963 crore or 23.1 per cent in the April to July period of 2003-04.

In consequence, the aggregate fiscal deficit of the Centre has touched 36.7 per cent of the Budget target, or 1.62 per cent of the GDP.

The corresponding figures were 34.2 per cent, or 1.64 per cent of the gross domestic product for 2003-04. The widening of the revenue deficit has come about despite s marginal slow down of non-Plan and Plan expenditure.

The non Plan expenditure till the end of July was Rs 93,048 crore, which is 28 per cent of the target for the current fiscal. In 2003-04 the percentage was 28.2 per cent.

In Plan expenditure, the figures were Rs 30,248 crore which aggregated to 20.8 per cent of the Budget figure. In 2003-04, in the same period, the government had spent 23.9 per cent of the target amount.

Despite Chidambaram's move to build up capital or investment expenditure, the slow down has been the sharpest here.

The government departments have spent only 19 per cent of their Budget estimate logging Rs 10,207 crore. The comparable figure was almost 25 per cent in the last fiscal at Rs 18,020 crore.

The primary deficit of the Centre, which ignores the impact of interest payments on the Centre's finances, was 174 per cent at Rs 13,780 crore. In 2003-04, the figures were 58.1 per cent at Rs 17,658 crore.