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Deficit at 61.2% of budget estimates

New Delhi, Aug. 29: The fiscal deficit during April-July stood at Rs 3.24 lakh crore, or 61.2 per cent of the full-year target.

During the first four months of the last fiscal, the deficit, or the gap between government expenditure and revenue, was 62.8 per cent of the budget estimates (BE).

Data released by the Controller General of Accounts today showed that the total expenditure of the government during April-July was over Rs 5.03 lakh crore, or 28.1 per cent of the estimates for the full year.

Of the total expenditure, plan spending was over Rs 1.32 lakh crore and non-plan Rs 3.71 lakh crore. Revenue collection was over Rs 1.75 lakh crore, or 14.8 per cent of the budget estimates.

Total receipts (from revenue and non-debt capital) during the four months was over Rs 1.79 lakh crore. The revenue deficit was over Rs 2.66 lakh crore, or 70.4 per cent of the budget estimates.

Finance ministry officials said, “In certain months, the government expenditure is higher. In those months, it is not necessary that revenues will also be higher. For instance, you know taxes are collected in a certain periodical manner. So taxes may come in September and expenditure in May”.

The fiscal deficit target for the whole of 2014-15 has been estimated at Rs 5.31 lakh crore, or 4.1 per cent of gross domestic product. The fiscal deficit was over Rs 5.08 lakh crore, or 4.5 per cent of GDP in 2013-14. It was 4.9 per cent in 2012-13.

Analysts expect the fall in global crude prices to lower the subsidy burden and contain the fiscal deficit, which will have an impact on inflation and prompt the Reserve Bank to lower interest rates.

A $1 fall in crude oil prices is estimated to reduce around Rs 6,000 crore from the annual import bill.

When the Union budget was announced on July 10, Brent crude prices were trading around $112-$113 per barrel, about $10 more than the current levels.

The government has put in place measures for fiscal consolidation to bring down the deficit to 3 per cent of GDP by 2016-17.

External debt up

The country’s external debt rose 7.6 per cent to $440.6 billion in 2013-14 on account of a rise in deposits by non-resident Indians. The debt stood at $390 billion the previous fiscal.

The share of NRI deposits rose to $103.8 billion at the end of March 2014 from $70.8 billion at March-end of 2013.

 
 
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