India Fiscal deficit doubles, Revenue deficit rises 4 times

The central government's fiscal deficit surged more than two-fold to Rs 2.2 lakh crore during the first four months of the current fiscal, on account of low revenue realisation and higher expenditure.

The deficit was Rs 90,915 crore in April-July period of 2010.

Fiscal deficit, the gap between overall expenditure and receipts, in the first four months of the financial year is almost 55% of the Budget estimate of Rs 4.12 lakh crore for 2011-12, as per the latest data of the Controller General of Accounts (CGA).

The rise in Centre's fiscal deficit is on account lower tax mobilisation compared to the same period last fiscal.

The revenue receipt stood at Rs 1,37,155 crore during the period against the Budget Estimate (BE) of Rs 7,89,892 crore for the entire fiscal. This is just 17.4 per cent of the BE.

At the same time, the non-tax revenue collection has declined sharply to 18.4% compared to 84.9% in the same period a year ago.

The non-tax revenue stood at Rs 23,077 crore as against the Budget Estimate of 1,25,435 crore. Besides, the government has mobilised just Rs 1,145 crore from disinvestment, although the target of the entire fiscal is Rs 40,000 crore. Disinvestment plan of the government has been hit due to uncertainty in the stock market fuelled by global economic slowdown.

Meanwhile, the revenue deficit, the difference between revenue earned and expenses, during April-July this year stood at Rs 1.94 lakh crore, which is almost four times more than the figure of Rs 50,075 crore in the first four months of 2010-11.

The latest number is 63.4% of the Budget Estimate of Rs 3.07 lakh crore.

The Huge differential over Year-O-Year, is due to Exceptional gains in 3G spectrum Sale. Indian government is experiencing the Losses Due to short fall due to reduction in Indirect taxes on Crude Oil and Petroleum Products on One hand, and falling Tax collection due to ' Slowing Economy'. Apart, the disinvestment programme is hugely off the Track, due to depressed Stock Prices. The Direct taxes rose, while its 1st tranche in June 2011. The rising Inflation, Stagnating Growth from June 11 onwards may have its effect in September 2011, direct tax receipts. The Government had estimated an budget shortfall to 4.6%. Many had envisaged the Indian Budget to miss the lower estimations