Hopes to rein deficit-GDP ratio to 3.8%

Our Bureau

New Delhi, June 1

The Centre has met the revised fiscal deficit target at 4.1 per cent of the gross domestic product (GDP) for 2005-06.

The revised fiscal deficit estimate of 4.1 per cent was announced in this Budget. In absolute terms, the fiscal deficit in 2005-06 stood at Rs 1,46,348 crore, marginally higher than the revised estimate target of Rs 1,46,175 crore.

According to the data released by the Controller-General of Accounts (CGA), revenue deficit for 2005-06 stood at Rs 94,644 crore, which is higher than the revised estimate of Rs 91,821 crore. In percentage terms, revenue deficit as a percentage of GDP stood at 2.7 per cent, higher than the revised estimate of 2.6 per cent.

An official release said that the deterioration in revenue deficit was largely on account of shortfall in revenue receipts not fully offset by savings in revenue expenditure.

It also said that the fiscal performance during 2005-06 reflected the commitment of the Government to fiscal consolidation and is in line with the roadmap envisaged under the Fiscal Responsibility legislation.

The gross tax receipts of Rs 3,65,874 crore shows a shortfall of Rs 4,267 crore against the revised estimates of Rs 3,70,141 crore. This shortfall in gross tax collections has been partly due to realisation of receipts of Rs 2,111 crore pertaining to fiscal 2005-06 in April 2006. After taking credit for this amount, the revenue deficit would stand at 2.6 per cent of GDP as projected in the revised estimates 2005-06.

In April 2006, the fiscal deficit has been pegged at Rs 31,956 crore. This accounted for 21.5 per cent of the full-year deficit target of Rs 1,48,686 crore, according to the CGA.

The Government is looking to rein in fiscal deficit to 3.8 per cent of the GDP in 2006-07 from a level of 4.1 per cent recorded in the previous fiscal.

The latest CGA data showed that revenue deficit in April 2006 stood at Rs 30,864 crore against the full-year target of Rs 84,727 crore.

(This article was published in the Business Line print edition dated June 2, 2006)
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