The Reserve Bank of India said on Thursday that the higher than expected revenue from the auctioning of 3G and BWA spectrum would keep the fiscal deficit within the target of 5.5 per cent of gross domestic product in the current fiscal.
"Higher than expected realisations on 3G and broadband wireless access auctions combines with buoyant tax revenues have virtually eliminated the risk of the fiscal deficit overshooting the targeted 5.5 per cent, even after the supplementary demand for grants is taken into account," the RBI said in its mid-quarter policy review.
The Budget for 2010-11 estimates the fiscal deficit, which represents excess government expenditure over its revenue, at Rs 3,81,408 crore (Rs 3,814.08 billion) or 5.5 per cent of GDP.
The government had got Parliamentary approval for spending an additional Rs 54,588.63 crore (Rs 545.88 billion) this fiscal to meet the requirements arising from the Commonwealth Games, anti-Naxal operations and compensating the oil marketing firms.
Backed by higher mop-up from auction of spectrum for high speed telecom services, the government expressed confidence of reining fiscal deficit at 5.5 per cent of GDP this fiscal.
Towards the end of the first quarter, the government had collected over Rs 1.06 lakh crore through the sale of spectrum (radio waves) for both 3G and Broadband Wireless Access against the Budget target of Rs 35,000 crore (Rs 350 billion).
During April-July 2010 period, the Centre's fiscal deficit stood at Rs 90,915 crore (Rs 909.15 billion), which is nearly 24 per cent of the estimate for the current financial year.
"With reference to government finances, the fiscal deficit appears to be conforming to the estimates made in he Union Budget for 2010-11 . . .
"This (higher revenue from spectrum auction) will help stabilise market expectations of liquidity and interest rate movements," RBI said.
As per the government data, in the first four months of the current fiscal, non-tax revenue receipts were Rs 1,25,703 crore (Rs 1,257.03 billion), 84.9 per cent of the full year target. During the corresponding period last year, non-tax revenue receipts was at 13.6 per cent of the estimate.
On the other hand, tax revenue receipts during April-July period reached 21.1 per cent of 2010-11 estimate at Rs 1,12,821 crore (Rs 1,128.21 billion).
The overall revenue receipts target is pegged at Rs 5,34,094 crore (Rs 5,340.94 billion) for the current fiscal.
The total expenditure in the first four months of the current fiscal stood at Rs 3,32,700 crore (Rs 3,327 billion), thereby reaching 30 per cent of the target for the full year.
The plan expenditure during April-July period is at Rs 1,09,800 crore (Rs 1,098 billion) and non-plan expenditure stood at Rs 2,22,900 crore (Rs 2,229 billion).
The government's expenditure for the current fiscal is targeted at Rs 11,08,749 crore (Rs 11,087.49 billion).
