The Hindu Business Line : Small savings see more outgo than inflows

New Delhi, Jan. 1 Repayments by the Central Government of past small savings deposits have exceeded the inflows up to end-November this fiscal. This has led to a negative balance of Rs 1,494.79 crore for the National Small Savings Fund (NSSF) as on end-November 2008.

The official data on sources of financing the deficit, released by the Controller General of Accounts (CGA) here, also showed that the net outgo on account of public provident funds upto end November this fiscal was Rs 1,451.79 crore. Savings deposit and certificates saw a net outflow of Rs 8,961.51 crore. These have been offset to a large extent by the income of NSSF to the tune of Rs 6,686.01 crore and income from investment in securities of Rs 2,232.5 crore.

However, economists point out that inflows on small savings front are usually brisk in the last quarter of fiscal year as receipts increase for saving tax. “The negative balance to the NSSF at this stage (end November) indicate that it is only adding to the centre’s deficit rather than helping to finance the deficit,” sources said. They said that it would be a Herculean effort to mobilise a massive inflow in the last quarter to make good the staggering negaitive balance and end up the year with positive budgeted balance of Rs 53.27 crore.

Meanwhile, the Centre’s fiscal deficit for the period up o November 30 this fiscal stood at Rs 1,76,510 crore, about 132.4 per cent of the budget estimate of Rs 1,33,287 crore. “There is nothing surprising about the fiscal deficit overshooting the budget estimate. It is consistent with our view. Our expectation is that the fiscal deficit as percentage of GDP would be 5 per cent (excluding off-balance sheet items),” Mr D.K.Joshi, Principal Economist, CRISIL, told Business Line.

Revenue deficit for the period under review stood at Rs 1,41,364 crore, against the budget estimate of Rs 55,184 crore.

Up to end-November 2008, the centre’s total expenditure stood at Rs 4,94,124 crore, reflecting 65.8 per cent of the budget estimate of Rs 7,50,884 crore. While actual outgo on the Plan expendure front at end November 2008 stood at Rs 1,36,130 crore (55.9 per cent of budget estimate), non-Plan expenditure stood at Rs 3,57,994 crore (70.5 per cent of budget estimate).

“There certainly is some under spend on the Plan expenditure side at the current stage (end November). Many of the plan expenditure requires matching grant from state governments. But given the stimulus that has been given for the economy the Centre should be able to realise the budget estimates on expenditure even though revenues are declining”, Mr N.R. Bhanumurthy, Economist at Institute of Economic Growth, said.

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