Interest outgo to slip marginally

Borrowings will continue to be the mainstay of government resources, accounting for 25 paise of each rupee revenue in 2005-06, but the lower interest regime would put a liability of 22 paise on every rupee.

The borrowing during 2005-06 would go up by one paise on each rupee along with a similar reduction in interest outgo.

According to the budget presented by finance minister P Chidambaram today, 14 paise of each rupee would be spent on defence in fiscal 2005-06 - the same as the current financial year.

The government has proposed a lower outgo on subsidies at seven paise of each rupee for the next fiscal as against eight paise for the current fiscal.

After borrowings, excise duties form a major part of government revenue at 20 paise followed by corporation tax at 18 paise.

Income tax gives 11 paise in the revenue of each rupee while custom duties would add eight paise.

On the expenditure side, other than interest payment, defence and subsidies, government would be spending 18 paise of each rupee earned on central plan and 16 paise would go to states as their share in taxes and duties.

Other non-plan expenditure has been increased to 12 paise from 11 paise and non-plan assistance to states and union territories has been doubled to six paise for 2005-06.