The State’s fiscal deficit for 2014-15 is likely to range between Rs.16,353 crore and Rs.23,724 crore and unbudgeted deficit between Rs.9,007 crore and Rs.16,078 crore.
Finance Department sources told The Hindu here that the two estimates had been worked out on the level of revenue deficit estimated on the basis of two scenarios. The first one assumed that the receipts and expenditure would grow at the same rate as in the previous year during the last six months of the current financial year.
The second premise was that the revenue deficit would remain at the same level as in the last financial year. The revenue deficit in the first estimate had been worked out at Rs.22,424 crore and the unanticipated deficit at Rs.14,778 crore. In the second case, it had been estimated at Rs.15,353 crore and Rs.7,707 crore respectively. The estimate of unpaid bills to government contractors had been pegged at Rs.1,500 crore. During the previous years, the Public Works Department (PWD) budget had exceeded by as much as 300 per cent.
The contractors were mounting pressure on the government to clear the arrears. But the present financial constraints did not provide the leeway to disburse the arrears.
If the present tax collection trends were any indication, even the projected revenues expected in the budget were unlikely to be achieved. Moreover, many additional revenue mobilisation efforts announced to address the financial crisis had to be repealed under pressure from different quarters.
During 2013-14, the taxes from four major sources, Sales Tax, Excise, Transport and Registration, grew at a rate of 38 per cent. Since the trend was prevailing, it was assumed that there would be a shortfall of Rs.1,300 crore on this score.
In effect, the deficit would range between Rs.16,353 crore and Rs.23,724 crore and the unbudgeted deficit between Rs.9,007 crore and Rs.16,078 crore, as per the estimates.
The government had failed to honour its commitments under the Fiscal Responsibility and Budget Management Act, 2003, to consistently bring down the revenue deficit to zero. Instead, it had only worsened to 2.81 per cent of the Gross Domestic Product (GDP). Such serious issues continued to remain unattended even now, which would worsen the crisis further, the sources said.
