The Hindu Business Line : April - Oct fiscal deficit declines

THE Centre has restored a semblance of control on its finances, with the gross fiscal deficit during April-October 2004 at Rs 62,135 crore, being 27.7 per cent lower than the corresponding figure of Rs 85,978 crore for the first seven months of 2003-04.

According to data released by the Controller General of Accounts (CGA) here on Tuesday, the Centre's fiscal deficit during April-October 2004 — representing the gap between its total expenditures and receipts from both current and non-debt capital sources — was only 45.2 per cent of the Budget estimate of Rs 1,37,407 crore for the entire current fiscal.

The revenue deficit — the difference between revenue expenditure and revenue receipts from tax and non-tax current receipts — for April-October 2004 was Rs 63,879 crore. It has also been estimated lower than the figure of Rs 70,856 crore for the corresponding period of 2003-04.

The improvement has been even more pronounced in the case of the primary deficit, which equals the fiscal deficit net of interest payments. While the primary deficit during April-October 2003 amounted to Rs 25,623 crore, the first seven months of the current fiscal has actually posted a primary surplus of Rs 981 crore.

On the revenue front, the Centre's revenue receipts during April-October 2004 stood at Rs 132,790 crore (against Rs 120,190 crore during April-October 2003) with net tax revenues of Rs 93,568 crore (Rs 79,589 crore). However, non-tax revenue collections were marginally lower (Rs 39,222 crore against Rs 40,601 crore). There was a similar drop in non-debt capital receipts (Rs 38,690 crore against Rs 47,602 crore) due to lower realisations from loan recoveries (Rs 38,468 crore versus Rs 46,385 crore) as well as disinvestment (Rs 222 versus Rs 1,217 crore).

As a result, total current and non-debt capital receipts during April-October 2004 at Rs 171,480 crore were only higher than Rs 167,792 crore realised during the year-ago period. This, along with a cut in total expenditure (from Rs 253,770 crore to Rs 233,615 crore), has led to a reduction in the fiscal deficit for the seven months of the current fiscal.

Within total expenditure, the axe has fallen most sharply on non-Plan spending (from Rs 193,469 crore during April-October 2003 to Rs 172,860 crore during April-October 2004), while there has been a slight increase in Plan spending (Rs 60,755 crore versus Rs 60,301) for the period under review.