India's fiscal deficit soared by 34 per cent to Rs 3.5 lakh crore in the first ten months of the financial year against Rs 2.62 lakh crore a year ago, mainly on account of the stimulus measures taken by the government to prop up the economy hit by the global financial crisis.
This makes the April-January fiscal deficit at 87.2 per cent of the budgeted estimate of 4.01 lakh crore for the current fiscal. To spur economic activities, the government had initiated massive spending programmes and slashed duties from December 2008 in three stage following the global financial crisis that began in September 2008.
However, partially rolling back the stimulus in Budget 2011, the Government has raised excise duty by 2 per cent to 10 per cent and enhanced tax rates on other products making consumer goods like cars, ACs and several other items expensive.
Finance Minister Pranab Mukherjee presented a Budget with fiscal deficit of 5.5 per cent for the next fiscal as he pegged total expenditure at Rs 11.09 lakh crore on an estimated revenue of total tax and non-tax at Rs 6.82 lakh crore for 2010-11.
The fiscal deficit for the current fiscal is pegged at 6.9 per cent, a tad over the previous estimate of 6.8 per cent.
Till January, the Centre's overall expenditure stood at over Rs 7.83 lakh crore, while receipts were way below at around Rs 4.34 lakh crore, leading to a deficit of nearly Rs 3.5 lakh crore.
The government had pegged total expenditure at the record level of over Rs 10.2 lakh crore this fiscal, 76.8 per cent of which has already been incurred till January. Of the over Rs 7.8-lakh crore expenditure incurred by the government, over 70 per cent is accounted by non-plan outgo including interest payments.
Meanwhile, the revenue deficit, which is the excess of revenue expenditure like salaries over revenue income, rose to Rs 2.84 lakh crore till January, an increase of 100 per cent over the the same time last year.
The government's tax collections at Rs 3.33 lakh crore contributed the most to its kitty.
Image: Reuters
