The Hindu Business Line : Lost fiscal ground regained

Thanks to the Fiscal Responsibility legislations, the Central Government and the State Governments have regained lost fiscal ground. Around Rs 1,10,268 crore of States' debt has been consolidated. Twenty States have availed of the benefit of debt waiver to the tune of Rs 8,575 crore.

In 2006-07, the Centre will give to the States as their share of taxes and duties Rs 1,20,377 crore. In 2007-08, this amount will increase to Rs 1,42,450 crore. Besides, total grants and loans, both under Plan and non-Plan, to States and Union Territories will increase from Rs 90,521 crore in 2006-07 to Rs 1,06,987 crore in 2007-08.

So far as the Central Government is concerned, the fiscal consolidation is proceeding according to the FRBM Act. Based on Revised Estimates, I am happy to report that the revenue deficit for the current year will be two per cent (against a BE of 2.1 per cent) and the fiscal deficit will be 3.7 per cent (against a BE of 3.8 per cent).

I estimate Plan expenditure for 2007-08 at Rs 2,05,100 crore. As a proportion of total expenditure (net of the SBI share acquisition), Plan expenditure will be 32 per cent.

Non-Plan Expenditure in 2007-08 (net of the SBI share acquisition) is estimated at Rs 435,421 crore. The increase over 2006-07 is only 6.5 per cent.

Mr Speaker, Sir, in the Budget Estimates for 2007-08, the total expenditure is estimated at Rs 6,80,521 crore (including Rs 40,000 crore for the SBI share acquisition). The total revenue receipts of the Central Government are projected to be Rs 4,86,422 crore and the revenue expenditure to be Rs 5,57,900 crore. Consequently, the revenue deficit is estimated at Rs 71,478 crore which is 1.5 per cent of the GDP. The fiscal deficit is estimated at Rs 1,50,948 crore, which is 3.3 per cent of the GDP. I am happy to report that we are on course to achieve the FRBMA targets.