The Hindu Business Line : Fiscal deficit drops in April-Dec

THERE seems to be some improvement in the Centre's finances, with the fiscal deficit during April-December 2004, at Rs 90,239 crore, being lower than the Rs 92,435-crore figure for the corresponding three quarters of 2003-04.

According to the latest data released by the Controller General of Accounts, the Centre's fiscal deficit during April-December 2004 — the difference between its total expenditures and its receipts from both current and non-debt capital sources — was only 65.7 per cent of the Budget estimate of Rs 1,37,407 crore for the entire current fiscal. The Budget had assumed the fiscal deficit for 2004-05 to rise from the revised estimate of Rs 132,103 crore for 2003-04.

The revenue deficit — the difference between the Centre's revenue expenditures and revenue receipts from tax and non-tax current receipts — for April-December 2004 was Rs 62,969 crore, which too, was estimated below the figure of Rs 72,999 crore for the corresponding period of 2003-04. At the same time, it has touched 82.7 per cent of the Budget estimate of Rs 76,171 crore for the whole of 2004-05.

The setback is, however, with respect to the primary deficit, which equals the fiscal deficit net of interest payments. While the primary deficit during April-December 2004, at Rs 10,354 crore, stood above the Rs 13,848 crore for the first nine months of 2003-04, it has already crossed the budget estimate of Rs 7,907 crore for 2004-05.

On the revenue side, the Centre's total revenue receipts during April-December 2004 stood at Rs 188,493 crore (against Rs 170,543 crore during April-December 2003), with net tax revenues being Rs 141,246 crore (Rs 118,795 crore). Significantly though, there was a drop in non-tax revenue collections, from Rs 51,748 crore to Rs 47,247 crore over this period. There was a similar decline in non-debt capital receipts (Rs 48,059 crore against Rs 53,325 crore) due to lower proceeds from loan recoveries (Rs 45,153 crore versus Rs 51,785 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-December 2004, at Rs 236,552 crore, were higher than Rs 223,868 crore realised during the corresponding year-ago period. This, along with a lesser extent of increase in total expenditure (from Rs 316,303 crore to Rs 326,791 crore), has led to a reduction in the fiscal deficit for the nine months of the current fiscal, from Rs 92,435 crore to Rs 90,239 crore.

Within the total expenditure, there has been an increase in both non-Plan spending (from Rs 239,614 crore during April-December 2003 to Rs 245,567 crore during April-December 2004) as well as Plan spending (from Rs 76,689 crore to Rs 81,224) for the period under review.

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