Spending curbs rein in fiscal deficit

The government's control over both Plan and non-Plan expenditure has helped rein in total expenditure to 68 per cent of the budget estimate at Rs 3,26,791 crore till December 2004.

This has increased the possibility of government staying on course to keep the fiscal deficit within Rs 1,37,407 crore as estimated in the Budget in 2004-05.

As per the data released by the Comptroller and Auditor General of Accounts today, the fiscal deficit at Rs 90,239 crore till December 2004 accounted for nearly 66 per cent of the Budget estimate, marginally higher than the 60.2 per cent of Budget estimate during April-December 2003.

Revenue deficit, however, continues to be a cause for concern at Rs 62,969 crore, nearly 83 per cent of the Budget estimates against a more moderate 65 per cent of Budget estimate during the same period a year ago.

The higher revenue deficit is mainly on account of lower revenue receipts at Rs 1,88,493 crore, 61 per cent of Budget estimate of Rs 3,09,322 crore. During April-December last year, the revenue receipts accounted for 67 per cent of the Budget estimate.

The lower receipts are due to a lower mop-up of both tax and non-tax revenue. Tax revenue till December 2004 accounted for 60 per cent of Budget estimates, while the non-tax revenue accounted for 63 per cent of the budget estimates compared to a far higher 74 per cent in the same period last year.

Lower revenue receipts coupled with lower non-debt capital receipts pulled down the total receipts to Rs 2,36,552 crore, accounting for 69.5 per cent of the Budget against nearly 79 per cent in the corresponding period a year ago.

The Plan expenditure at Rs 81,224 crore, accounting for 56 per cent of Budget estimate, was far lower than the 63.4 per cent of Budget estimate attained during April-December 2003.

The performance on the non-Plan side was also marginally better than last year at Rs 2,45,567 crore, accounting for 74 per cent of Budget estimate against 75 per cent in 2003-04.

The non-Plan expenditure on capital account though higher than the Budget estimates was lower compared to that of last year at Rs 47,359, accounting for 123 per cent of the Budget as against 159 per cent during April-December 2003.

The sharper control over expenditure also reduced the government's market borrowing to Rs 38,404 crore up to December accounting for 42 per cent of the budget estimate compared to 70 per cent in the same period a year ago. External financing was however higher at Rs 8,967 crore compared to Rs 8,076 crore estimated in the budget.