The Reserve Bank of India (RBI) today said that revenue deficit would be at its highest-level ever while primary deficit would both be at its highest in India's post-reform period.
The increase in revenue deficit is mainly on account of higher growth in revenue expenditure which more than offset the increase in revenue receipts, the RBI said in its Macroeconomic and Monetary Developments First Quarter Review 2009-10.
With capital outlay also increasing substnatially, gross fiscal deficit (GFD) is budgeted to increase over both revised estimates and provisional accounts for 2008-09, it said.
The Union Budget for FY10 has proposed to sustain the fiscal stimulus that was introduced in the previous year to provide the necessary boost to demand and thereby revive growth prospects.
"Given the stated goal of reverting to the 9 per cent growth path over the next three-years, the pronouncements in the budget were aimed at enhancing consumption demand, investment demand as also domestic savings, through appropriate combination of allocations of expenditure and tax concessions," the RBI said.
As a result, key deficit indicators-revenue deficit,gross fiscal deficit and gross primary deficit as a per cent of GDP, are budgeted higher than those in FY09, the RBI said.
