Today's Paper

Fiscal situation grim

NEW DELHI, JAN. 31. With less than a month to go for the general budget, the shape of Government finances continues to be precarious. There has been a sharp increase in the Central Government's non-Plan expenditure during December 2001. This has resulted in the fiscal deficit shooting up by about Rs. 10,000 crores that month.

Official data now available suggests that non-Plan expenditure during December increased by Rs. 23,573 crores while Plan expenditure, which is development expenditure, went up by about Rs. 9,537 crores. In effect, the total Government expenditure increased by Rs. 33,110 crores in one month while the total receipts, that is tax and non-tax revenues and recovery of loans, totalled up to Rs. 23,229 crores. This despite December being the month when advance income and corporate tax instalments flow into the official kitty.

Consequently, the gap between the total expenditure and the total revenue receipts worked out to Rs. 9,881 crores, exactly the same amount by which the fiscal deficit shot up that month. The overall fiscal deficit during the first nine months of the current fiscal reached a level of Rs. 89,014 crores which is 76.5 per cent of the annual target. A comparison with the performance in the previous year shows that the fiscal deficit during April-December 2000 had been just 58.1 per cent of the target. Incidentally, the Government has also exhausted its quota of market borrowings for 2001-02 fiscal year by December itself.

That revenues are running short of target has also been corroborated by official figures which show that tax revenues during the first nine months amounted to only 52.1 per cent of the annual target, whereas they were 62.7 per cent in the comparable period of the previous year.

In November also, the Government had incurred a non- plan expenditure of Rs. 21,579 crores while plan expenditure was only about Rs. 6,629 crores. The fiscal deficit in that month had shot up by over Rs. 15,000 crores.

Recommended for you