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The government seems to have got its math right and is on course to meet the fiscal deficit target of 3.9 per cent of GDP for 2015-16.
With just two days left of the financial year 2015-16 to end, the Finance Ministry is banking on low global crude oil prices and excise levies on petro-products to shore up the numbers.
“In contrast to previous years, the focus has been on expenditure and no drastic cuts in spending just to improve the deficit. However, there are some internal savings that will be reflected in the official data that will help meet the target,” said a senior government official.
Expenditure, according to the Revised Estimate, is higher than what was budgeted at the start of the year. The Revised Estimate (RE) for the Centre’s total expenditure in 2015-16 is pegged at ₹17.85 lakh crore, as against the Budget Estimate (BE) of ₹17.77 lakh crore.
A clearer picture of the Centre’s fiscal situation will be available by May when the Controller General of Accounts will provide provisional data on the Centre’s finances for 2015-16.
According to the last available data till January end, the Centre’s fiscal deficit was ₹5.32 lakh crore or 95.8 per cent of the full year target. Data for February will be available on March 31.
Fuel savings Another Finance Ministry official said savings on the fuel subsidies along with additional levies on petrol and diesel have given a cushion to the exchequer to offset the lower target from disinvestment.
“Advance tax payments are also as expected and will help in meeting the targets,” he said, adding that tax collection is on track.
Analysts too said the fiscal deficit target will be met but contended that there has been some expenditure cuts.
“There has been some improvement in revenue collections through additional levies on fuel. But there has also been some compression in spending, especially capital expenditure,” said DK Pant, Chief Economist, India Ratings.
Capital expenditure is pegged at ₹2.37 lakh crore in the RE for 2015-16 as against the BE of ₹2.41 lakh crore.
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