Higher plan expenditure, lower tax growth push up fiscal deficit

The fiscal deficit in the first seven months of FY14 stood at Rs 457886 crore, which was 84.4% as a proportion of Budget Estimate (BE) compared with 71.6% in the same period last year 2013. The month of October 2013 showed a fiscal deficit of Rs 45798 crore, much higher than Rs 7437 crore seen previous month. In April-October 2013, fiscal deficit recorded a 24.45% growth compared with same period last year. The upside to fiscal deficit was largely due to rise in the plan expenditure along with rise in non-plan expenditure in April-October 2013. On other hand, lower tax revenue growth by 6.78% in April-October 2013 also fueled higher fiscal deficit. The tax revenue again took a toll as only Rs 356526 crore, 40% of the BE of Rs 884078 crore, was collected in the first seven months of FY14. For the month of October 2013, the fiscal deficit at Rs 45798 crore is much higher than a fiscal deficit of Rs 31016 crore during October 2012. The reason for this slippage has been a considerably sharp increase in the plan expenditure.

Revenue deficit recorded 23.75% growth to Rs 353010 crore in April-October 2013 compared with Rs 285252 crore in April-October 2012. Revenue deficit during October 2013 was noted higher at Rs 30733 crore, against a Revenue deficit of Rs 21968 crore seen October 2012.The revenue deficit stood at 92.9% of BE in April-October 2013 compared with 81.4% in April-October 2012.

The primary deficit in October 2013 stood at Rs 21403 crore, which was higher than Rs 6330 crore seen in October 2012. The cumulative primary deficit for April-October 2013-14 rose to Rs 273464 crore from Rs 212069 crore seen same time previous fiscal, marking rise of 28.95%. This accounted to 159.2% of the BE.

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