The Hindu Business Line : H1 fiscal deficit down 24.5 per cent

THE Centre's finances appear to be in a much better shape this year, with the fiscal deficit during April-November 2004, at Rs 70,717 crore, being 24.5 per cent lower than the Rs 93,656 crore figure for the corresponding eight months of 2003-04.

According to the latest data released by the Controller General of Accounts (CGA), the Centre's fiscal deficit during April-November 2004 — the difference between its total expenditures and its receipts from both current and non-debt capital sources — was only 51.5 per cent of the Budget estimate of Rs 1,37,407 crore for the entire current fiscal.

The revenue deficit — the difference between its revenue expenditures and revenue receipts from tax and non-tax current receipts — for April-November 2004 was Rs 73,948 crore, which too, was estimated below the figure of Rs 76,701 crore for the corresponding period of 2003-04. At the same time, it has touched 97.1 per cent of the Budget estimate of Rs 76,171 crore for the whole of 2004-05.

The real improvement has been pronounced in the case of the primary deficit, which equals the fiscal deficit net of interest payments. While the primary deficit during April-November 2003 amounted to Rs 23,818 crore, the first eight months of the current fiscal has actually posted a primary surplus of Rs 3,908 crore. And since interest payments are a committed expenditure on which the Government exercises little discretionary control, a surplus on the primary account represents good news on the fiscal front.

On the revenue side, the Centre's total revenue receipts during April-November 2004 stood at Rs 149,061 crore (against Rs 137,084 crore during April-November 2003) with net tax revenues being Rs 1,06,669 crore (Rs 90,010 crore). Significantly though, there was a drop in non-tax revenue collections, from Rs 47,074 crore to Rs 42,392 crore over this period. There was a similar decline in non-debt capital receipts (Rs 44,625 crore against Rs 49,311 crore) due to lower proceeds from loan recoveries (Rs 41,719 crore versus Rs 47,771 crore) and only partially offset by higher disinvestment realisations (Rs 2,906 versus Rs 1,540 crore).

As a result, total revenue and non-debt capital receipts during April-November 2004, at Rs 1,93,686 crore, were higher than Rs 1,86,395 crore realised during the year-ago period. This, along with a cut in total expenditure (from Rs 2,80,051 crore to Rs 2,64,403 crore), has led to a reduction in the fiscal deficit for the eight months of the current fiscal, from Rs 93,656 crore to Rs 70,717 crore.

Within the total expenditure, the axe has fallen most sharply on the non-Plan spending (from Rs 2,13,474 crore during April-November 2003 to Rs 1,95,511 crore during April-November 2004), while there has been a slight increase in the Plan spending (from Rs 66,577 crore to Rs 68,892) for the period under review. This again represents an overall healthy trend.

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